Thanks to the internet, it’s easier than ever to start your own business with next to nothing, but that doesn’t mean that it is always going to be easy.
At some point, you are probably going to need some extra funding to take your business venture to the next level, and this can be difficult if you don’t meet the usual requirements for getting a business loan.
If you’re running a business on a budget, here are some alternative funding options that you might want to consider:
A non-conforming loan does exactly what it says on the tin. It provides businesses who don’t conform to the usual standards required for borrowing money with the funds that they need. For example, if your business isn’t bringing in enough profit to get a bank loan, or you’re dealing with a poor personal credit score that is holding you back from getting business funding, a non-conforming loan could help.
These loans are designed to help business owners who do not meet the requirements to go down the typical route of getting business funding, which can be very useful if you’re running a business on a budget. They also typically offer lower loan amounts compared with banks, which can be a good option if you only need a small amount of capital to achieve your objectives.
Crowdfunding is another great option to consider if you want to start a small business on a budget. If you have had a great business idea that you think other people would like to invest in, try a crowdfunding app.
Crowdfunding is often easier to encourage compared to getting one or two people to invest larger amounts in your business since you are asking a lot of people to invest just a small amount of money.
Even $10 from a thousand people will be quite a lot of capital for your new business venture, and your investors will be able to reap the benefits in the future.
In some cases, it might make sense to get a personal loan to fund your business, but this should only really be done as a last resort, as personal loans are not usually designed to help get a business off the ground. If you are planning to operate as a sole trader or setting up a business as a side hustle, a personal loan might be a more manageable option compared to a business loan, and easier to get.
On the other hand, if you plan to incorporate your company, it’s worth avoiding personal loans and looking into business finance options since it is more important to keep your business and personal finances separate when your company is a separate entity to yourself.
Starting a small business on a budget is easier than ever, but at some point, you might need funding. If you are not eligible for a standard business loan from the bank, there are several options to consider instead.