5 Less Conventional Ways to Fund Your Small Business

Many people nowadays complain that they have hard time persuading banks to loan them money for their prospective small businesses, even if they have a solid business plan and ideal credit history on hand. However, if you really want to start out, there are less conventional ways to get some extra cash. Most of them won’t be enough on their own – but people usually neglect them in terms of potential sources of capital for a business.

Here are some examples.

Funding for small business

1. Friends and Family

If you have a lot of relatively close friends and/or a large extended family, you can get at least a part of the necessary capital from them. Even a substantial sum quickly becomes manageable once you break it into many tiny bits. You will have hard time persuading any single person to lend you $5,000 to fund your business idea, but persuading 50 people to lend you a hundred is a much more approachable task. When taken in conjunction with other methods, it can take you a long way.

2. Title Loan

Getting a title loan against the value of your car can get you some much needed extra cash very quickly – it is very much akin to home equity loans but usually takes less time. Of course, you should take extra care to read the small print and understand what exactly you sign up for, and only deal with trustworthy firms like this title loans California company.

3. A Job

Starting a business doesn’t mean that you have to immediately quit your day job. With smart time management and delegation you can pull it off while keeping it so that your wages keep you afloat even if your venture won’t take off immediately. If you feel especially ambitious, you may even try getting a second job – just be careful not to burn yourself out.

Weekend business competition
photo credit: Steven Zwerink / Flickr

4. Try out Grants and Business Competitions

Numerous individuals and organizations invest millions of dollars every year in the form of grants and awards in entrepreneur competitions. If you have a sound business idea and a solid business plan, you may enter one (or many) such competitions and, if you are capable to sell your point across, quickly get the necessary capital to cover all your immediate expenses. Internet makes finding these opportunities, both global and local, quite easy.

5. Get Your Prospective Customers to Invest

Although crowdfunding projects nowadays rarely get as much traction and trust as they did a few years ago, the business model based on selling now and providing goods later is still fairly popular. Investing other people’s money and making it work is always the best policy – at least when you can pay them back eventually.

As you may see, if you really want to start a business of your own and know what you are doing, lack of funds isn’t enough to keep you down. With enough pluck and ingenuity, you always can find capital to finance your ideas – just make sure first that the ideas are worth it!