It's a brave new world out there for start-ups seeking funding. With banks still hesitant, and VC's being choosy, what's your strategy going to be?
1. Personal Savings. If you dream of running your own business, then start setting aside personal savings. It's important to understand that any kind of business involves risks. Hence, aside from the start up capital, it's best to have personal funds that can support you and your family in case the business does not go as well as expected.
2. Sell Assets. Another way to save business funds is to do some selling. For example, if you have an old car or other valuable assets that is worth a considerable amount of money, then selling is another smart strategy.
3. Apply for a personal Loan. Another way to raise a start up capital is to apply for a personal loan. Many lending companies offer personal loans which can be used for many different reasons such as for starting a business. Apart from commercial lenders, you can also inquire from credit unions or microfinance institutions for possible unsecured personal loan programs that you can get.
4. Check out Government Programs. Don't forget to check the U.S. Small Business Administration (SBA) for possible loan programs that matches your business. If you are having trouble getting approved for a small business loan from a private lender, the SBA can assist you by guaranteeing your loan.
5. Seek help from angels. Angel investors can be individuals or a private group who would be interested in investing in your small business. Once you have found a prospective angel investor, it's important to present an impressive business plan to show that your business has a very strong potential to survive the market.
6. Apply for a business credit card. Applying for a credit card that is really designed for business can provide the much-needed support especially if you are working on a limited budget. Once approved, you can charge expenses or purchases to your business credit card and pay for them at a later time. That should give you the chance to produce and sell your products as you try to stretch your cash flow. Business credit cards are also great tools for building credit history for your small business which will make it easier for you to get approved for larger financing from banks and lending companies.