Getting a new business—a startup—up and running takes more than a unique idea, boundless energy, and great intent. It also requires funding. Solid ongoing financing and financial management are keys to successfully start and build a business.
How to Finance a Startup
The ways to generate financing for a startup include:
• Pursue a grant. There are many grants available from state and national governments as well as private enterprises that seek to stimulate the economy.
• Seek crowdfunding—a now popular method enabled by the digital economy. The challenge will be to be seen among the many seeking funds.
• Generate funds from family and friends but be mindful of the potential impact on relationships.
• Seek angel investors—high net worth individuals who have a track record of looking for new opportunities in startup concepts. The key will be persuading them with the potential of your idea and business model.
• Apply for traditional bank loans. A good banking relationship is highly valuable.
• Get funding from the Small Business Administration’s SBA lenders. SBA loans have attractive rates and repayment terms.
• Seek alternative financing from micro-finance institutions and online lenders.
• Utilize personal savings, home equity, or credit card debt. Exercise care with each of these.
Know that every business startup financing source will ask for a business plan that identifies how much capital is required, how it will be used, how it will be paid back, and how funds may be secured. A cash flow projection will also be required. The character and credit history of the business founders will also be scrutinized.
How Can a Startup Succeed?
Success can come as a startup has:
• The funding it needs.
• A strong founding team.
• An appealing product or service that fits the market.
• Strong operations.
Seek Expert Financial Assistance
Contact Star Capital for financial solutions to address your startup and ongoing capital needs. Our experienced financial professionals can help you secure funding to meet your business’s financial needs and goals.