You believe you have a million-dollar business idea but lack the funding? You are not the only one. A quick look around and you would get to meet dozens of people in the same situation – plenty of ideas but no cash to initiate any of them. That is the first of many roadblocks that distinguish a successful entrepreneur from the wannabes though! Entrepreneurs are the type of people who “jump off a cliff and build a plane on the way down”, and that’s precisely what you need to do to transform that brilliant idea into a successful business. And I assure you – there are plenty of methods to do it!
Starting from low-rate loans, to family and friends, to crowdfunding sites, money is available as long as you know where to look for it, and how to prove you deserve it. Let’s look at 5 of the best methods of getting funding for your prospective business:
Bank loans – Traditional and non-traditional, bank loans are a very popular funding option among businesses. However, it is extremely difficult to gain a bank loan if you have, or are planning to have, a startup business. The way banks function requires the loan applicants to have a strong financial history with their business, solid business plans, sales projections, and anything else that proves your business’ worthiness, making it almost impossible for startups. A remarkable advantage of taking a Singapore business loan is the low interest rate though, with its prime lending rate of 5.35 being more than decent for businesses.
Family and Friends – If this option is available, it is definitely a very practical solution. Family and friends are your best bet if you need someone to trust you and your idea. Additionally, the interest rate will be very low, if any at all – family will not usually look to profit from you, though it might be a good idea to compensate them considering the compensation they would get if they time-deposit their money on a bank. Be careful though, as such funding has been known to bring issues later on with the business ownership. It is strongly suggested to still get an attorney and put everything on paper, from interest rates and repayments to the possibility of business ownership or shares. Cases of misunderstandings leading to people believing they own a share on the business they helped fund have been plenty!
Personal Assets and Savings – The easiest and most practical solution, if available of course. There is simply nothing better than using your own money, taking your own risks, and not worrying about any pressure of repaying the money, even if you do not reach your goals. Cashing in on property, bonds, stocks, or other investment could be a better idea than risking collateral, dealing with the pressure of paying back, and paying interest for lending money elsewhere. Starting small with whatever money you have available and investing your earnings as you go is a very convenient idea as well – that way, you do not have to worry about reporting or paying back, you have more time and flexibility to adapt to the industry better, and it allows you to cut your losses considerably.
Crowdfunding – the latest way of receiving funds for your business idea, Crowdfunding could also be the easiest if you have an awesome idea and story behind it. By simply registering on a site such as Kickstarter.com or IndieGoGo.com, you can publish your idea and set a funding target. If people like your idea, you might get millions of dollars in funding to make it a reality – just recently, a smart cooler project broke the record in Crowdfunding, collecting a staggering $13.28m for its idea.
Grants – Last but not least, grants are also very helpful if they are available in your area and industry -grants are continuously given with special attention for environmentally friendly and community developing business projects. Applying for a grant might be difficult, and you have to prove the credibility of your academic and professional background, business idea, business plan, and many more in order to convince the grant programs of your worthiness.
We all know that as brilliant as it may be, the business idea might often not be enough to get up on your feet. However, working hard to receive the funding to at least initiate the business should always be worth the extra effort. Remember, it is better to try and fail, than not try at all.
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