Securing funding that works for your business is tough. We get it. Here are nine tips to help you in your search:
1. Know thyself.
Make sure you know where your business stands before looking for funding. Do you know your credit score? How are your financials? Have you filed your taxes? Having your ducks in a row beforehand can save a lot of time and grief later on.
2. Know your options.
With the rise of technology has come the rise of innovative solutions for nearly all of life’s needs— business funding is no exception. There are a lot of options out there. Make sure you research what’s available and what makes sense for you given the stage of your business and your revenue.
3. Remember lending regulations are strict.
In recent years, there’s a heap of new regulations lenders must comply with, making it hard and expensive for both the borrower and the lender. Make sure you understand the factors that affect your chances of getting funded.
4. Decide if you are willing to give up equity.
If you are willing to give up part ownership of your business in exchange for funding, equity investors—such as angel investors—may be a good option for you. If not, you should focus on finding a business loan or grants.
5. Can you offer up collateral?
Some loans—such as bank loans—require you to offer up your property, such as your sweet ride or house, as security in the event that you default on a loan. Liens can be a burden you may not want to take on. An alternative is to seek out lenders that require a personal guarantee instead.
6. Be prepared to pitch your business.
People can freak out when they hear the word “pitch”—but it’s not as scary as you think. As a business owner, you know your company inside and out and are fully qualified to be its spokesperson. Before looking for funding, be prepared to tell someone what your business is and why your company is a worthwhile investment.
7. Do your homework.
Nothing is worse than showing up to a job interview without having researched the company and stumbling over your words. You should take funding applications just as seriously—be prepared to answer hard questions, such as exactly how you intend to use the money and how you plan to pay it back.
8. Think outside the box.
Funding can sometimes come from an unconventional source. If you’re a young business, try a crowdfunding campaign like Indiegogo, look for small business grants, or consider an alternative lender that can offer unsecured loans fast and cheaply.
9. Have confidence in your abilities.
You’ve got this!
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