How to Get Funding for a Business?

If you’re planning to start a business, you will most certainly need to secure some type of funding. Without capital, you won’t be able to turn your vision of a profitable business model into a reality. Thankfully, there are several different funding options available, some of which we will discuss in this blog post. So let’s jump right into how to get funding for a business.

How to Get Funding for a Business?

Bootstrapping

Bootstrapping refers to the use of existing, personal cash to fund a small business or idea. According to a study cited by BusinessNewsDaily, 80% of early stage business owners use their own personal funds. It’s a simple and effective funding solution, and it doesn’t require good credit or other traditional lending factors. For these reasons and others, entrepreneurs should consider funding their business with at least some of their personal cash.

Debt Capital

Another funding option is debt capital, which as the name suggests involves taking on debt. Traditional bank loans and credit cards are a form of debt capital. The respective financial institution loans you money under the conditions that you’ll pay it back according to schedule. Normally, however, debt capital requires a strong credit history and sound business plan; otherwise, the lender may view you as being a high risk borrower.

There are two specific types of debt capital:

1. Secured: requires some type of collateral, which the borrower may repossess if you fail to pay back the loan or otherwise meet the terms and conditions.
2. Unsecured: does not require any collateral; unsecured debt capital is more difficult to acquire than secured capital.

Equity Capital

Alternatively, there’s equity capital, which doesn’t require the business owner to take on debt in exchange for funding. Instead, the business owners sell partial ownership of his or her business (in the form of stocks) to an investor of investment firm.

Equity capital is often preferred among entrepreneurs of startup of businesses because it’s relatively easy to obtain. If an investor believes the business will be profitable, he or she may fund it. It’s a win-win for both the investor and the business owner. The business owner receives funding for his or her business, while the investor generates revenue through stock ownership when the business becomes successful.

These are just a few ways to get funding for your business.

This article was brought to you by Intrepid Private Capital�Group � A Global Financial Services Company. For more information on startup and business funding, or to complete a funding application, please visit our website.