We know that all businesses require funding to succeed and grow. This is the reason why majority of first-time business owners considering raising money through different funancing options, but primarily venture capital. However, it might not be the best idea. Private firms offer venture capital to startups and small businesses in exchange for a share of equity in their company. Moreover, this capital allows the investor to become a part-owner and a shareholder. But giving a part of your company that hasn’t even started is not a good idea. So, what if we tell you that there are quite a few options for you choose from to finance your startup?
In this article, we are going to help you learn about the most creative and trouble-free funding options that can prove highly beneficial for your startup.
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Home Equity Line of Credit
Owning a home is one of the most significant achievements of your life. You might not be aware, but apart from being a shelter, your home can also help you generate funds for your home. Yes, you guessed it right; we are talking about a home equity loan and a home equity line of credit. By keeping your house as collateral, you can get your equity share. Moreover, you might be thinking that leveraging your home might be risky. But that’s not true; to save your house in foreclosure, all you need to do is make the payments on time.
In addition, the low interest rates and personalized payment options make a home equity loan worth it. And you would be surprised to know that with the increase in the market value, your home equity share can also significantly increase. You can apply for a home equity loan or a home equity line of credit (HELOC) by Amerisave to get funding for your startup.
Crowdfunding
Crowdfunding is a secure funding method that allows you to generate money by being in direct contact with consumers. Two of the most incredible platforms that can help you generate money are Kickstarter and Indiegogo. Furthermore, crowdfunding allows you to collect small amounts of funds from a large group of people. It has helped the new entrepreneurs gather funds in a short time. Another benefit of crowdfunding is that it lets your business’s approach reach a vast audience.
Moreover equity-based crowdfunding is one of the most common types of crowdfunding, as it allows startups to raise money without giving control to venture capital. If you want to use this method to generate funds for your startup, all you need to do is create a compelling story that resonates with potential buyers.
Traditional Bank Loans
One of the most outdated methods of getting funds is traditional bank loans. These loans have helped many entrepreneurs become successful. Moreover, it is also considered one of the safest loan options. You can avail a personal loan or use your credit card to access money. Plus, a bank loan is a thousand times better than venture capital. However, the only downside of the bank is the high interest payments. If these payments are not made on time, you can also land in high debt. That’s why you need to be extremely careful while applying for a bank loan.
Lastly, government grants, emergency funds, sweat equity, and revenue-based financing are some of the excellent funding options to finance your startup without falling prey to these venture capitalists.