If you want to start a new business, you need a source of funding. Business owners have always faced this challenge. One difference for entrepreneurs today is that there are now many more options for startup finances than ever before. If you’re wondering about ways to get cash for startup costs, the following 5 possibilities are a good place to start.
Top 5 Ways to Generate Cash for a Startup Business
1. Do An Audit
Before you even consider the best ways to get cash for startup costs, you need a clear idea of how much cash you actually need. This requires you to conduct a thorough audit of your resources. This includes savings, salary, and any financial assets you can either cash in or use as collateral. Keep in mind that you should only invest assets that you can afford to lose when starting a new business.
2. Reach Out to People You Know
Don’t overlook your own circle as a possible source of funding. This includes family, friends, and acquaintances who might be interested in becoming investors. At the same time, getting involved in financial transactions with friends and family can be complicated. Make sure you agree on the terms and put everything in writing just as you would when dealing with outside investors or banks.
3. Create a Solid Business Plan
Many new entrepreneurs don’t appreciate just how crucial it is to have a comprehensive business plan. Financial institutions and serious investors will want to see that you’ve done your research and have everything well planned. You need to explain who your target audience is, why your business will fill a demand and how you plan to market it. If you want someone to invest in your business, you must be able to explain exactly what you plan to do with their money and why your strategy is likely to succeed.
4. Consider All Your Options
As noted, there are more possibilities for startup finances now than ever before. It’s best to consider both traditional and innovative sources of funding. Here are a few possibilities.
- Bank Loans. Borrowing money from banks is the traditional approach and often require a solid track record and credit history.
- SBA Loans. These loans are often easier to secure than those from traditional banks. You may, however, need to put up collateral.
- Venture Capital. Venture capitalists may be interested in funding your business, especially if it shows promise for fast growth.
- Crowdfunding. Websites such as Kickstarter, GoFundMe, Indiegogo and many others let you raise capital independently.
- Invoice Factoring. This is a creative type of financing that allows you to collect cash immediately for accounts receivable. Newer businesses that are turned down for bank loans may still be eligible for invoice factoring.
5. Be Creative and Persistent
It’s best to get as creative as possible with your get cash for startup plans. You also need a great deal of persistence and determination as you may get turned down by many investors. You have nothing to lose by researching different methods and talking to different people and companies. Don’t overlook any possible source of funding and consider using multiple sources of funding.
Invoice factoring is a simple, yet powerful way for businesses to quickly improve their cash flow situation. If you want to learn more about how invoice factoring works and how it can benefit your business, contact Riviera Finance, the experts for more than 49 years.