Unless you have considerable wealth, you may need to get funding before you may take your idea for a new business to the next level. Startup expenses add up fast and may include anything from professional licensing or permit fees to insurance, website development and technological investments.
CoFounder reports that the average cost of starting a business is about $30,000. Where might you be able to get the capital you need to get your new business up and running?
Through a bank loan
Securing a bank loan is one way to obtain funding for your new business. Benefits of borrowing from a bank often include low-interest rates and tax benefits, among others. Your chance of obtaining funding through a bank – and at a favorable rate – depends to some degree on your credit history.
Through a business credit card
If you were close, but unable, to qualify for a bank loan, you may have better luck funding your business with a business credit card. It is often easier to qualify for a credit card than a formal loan. However, these cards may carry high-interest rates, so always do your research before taking out a new one.
Through a venture capitalist
While less common, some entrepreneurs secure funding for their new businesses by working with venture capitalists. A big benefit of doing so involves the fact that if your business fails, you do not have to pay back the investor, because he or she backed you knowing that there was risk involved in doing so.
While these are some of the ways you may want to go about funding your new business, please note that this is not an exhaustive list of all possible funding options.