You’ve probably been told that you need to spend money to make money. That’s especially true when starting a business. Unless you have cash sitting around in your savings account, you’ll probably need to look for some other sources. Here are some options.
Sell Your Car
Even if your car is not in great condition, you can still get some money for your junk car. Companies exist that will buy cars in any condition. It doesn’t even need to be capable of moving under its own power.
Lean on Family and Friends
It might not feel good to ask your friends and family for money, but you shouldn’t rule it out. Someone might even surprise you by having more money and generosity than you expected.
There is a sticking point here. You need to decide whether to ask for gifts or offer something in return.
You could ask for a loan where you promise to pay them back after a defined time, perhaps with interest. This is pretty straightforward but bears the risk of ruining a relationship if you can’t pay them back.
The other option is offering equity in the company. Once again, it’s risky because if the company doesn’t turn any profits, you won’t have anything to give the person who helped you. Or the company could become so valuable that you wish you hadn’t given away a stake in it so easily.
If these options seem bad, you could simply ask for a gift. This might be the hardest thing to ask for, and your people may not be willing to give much, but there is freedom in no-strings-attached money.
Your Credit
If you have bad credit — or no credit — you can skip this one. Tapping your personal credit can be an easy source of funds but it can also be very risky.
There are a few ways to tap your credit for money, including credit card loans and home equity loans. But think hard before choosing either of these because the consequences for failing to pay could be dire. In fact, you could lose your house.
Government Grants
Often the Government gives grants to promote certain activities and research. However, getting these grants involves lots of paperwork and can come with massive restrictions.
Suppliers
If you can convince suppliers to give you company 30 days to pay an invoice, you can buy vital supplies without needing to put any money down. And as long as you make enough sales in those 30 days, you won’t have any trouble paying the supplier back.
Peer-to-Peer Lenders/CrowdFunding
Peer-to-peer loans work the way they sound: ordinary people can invest and ordinary people can borrow. Typically, a technology platform acts as an intermediary to match lenders with borrowers and perform due diligence.
You’ll want to be careful here as well because failure to pay back the loan on time could ruin your personal credit.
These five ways are a good place to start if you’re considering starting a business. There may be downsides and risks, but if your business idea is good enough, it might just be worth it.
You might also like: