Nowadays, a startup business is many budding entrepreneur’s dreams. Materials, machines, manpower, and money are the four essential elements needed to start a business. Here money stands for capital. You need corporate finance to run the day-to-day operations of your business and many other purposes. However, the most relevant question is how to get it. You can also do a market survey and look for innovative ways to get startup capital for your business. You also need inspiration, willpower, and knowledge to successfully run any business. Depending on the type of business you want to carry out, the amount of startup capital will vary. Given below are some proven techniques to successfully get startup capital for your business:
1) Using your credit card
You can use your credit card if your startup business financing requirement is not so big. Cash advances through credit cards are a useful means to gain startup capital for business. If you are a disciplined payer then your credit limit can enhance to a significant extent and you can utilize this to get capital finance for your startup.
2) Use check re-discounting
Check re-discounting is also a method to get startup capital for your business. Check re-discounting offers are frequently available from lenders. You need to issue post-dated checks in return for the value of the check-in cash minus the interest. For instance, at a 5% rate of interest, you will get $ 9,500 if you issue a check of $10,000. The interest rate and tenures are different from one lender to another. However, you have to make sure that you have sufficient funds to clear the check promptly. Nonetheless, it is not so popular as cash advances with credit cards.
3) Borrow money from your family and friends
You can also finance your startup by borrowing from your acquaintances and family. The most advantageous part of this is that you can borrow it under the most suitable terms and conditions. It might happen that you are borrowing from them without any requirement to pay interest. The payment conditions can also be flexible. However, you should repay the money to the family or your friend as soon as possible because it is a question of trust. If possible, agree or contract with them to instill a sense of confidence in their mind about your competency.
4) Create a joint venture
Rather than borrowing from your family and friends, you can also create a joint venture with some people you know. Each of them will source some funds to finance your business. Moreover, you can use the personal skills of all the partners such as legal knowledge, accounting expertise, and sales and marketing skills.
5) Debt and equity financing
Other than the above-mentioned options, the last but not the least option is debt and equity financing. Debt financing is financing with loans taken out from financial institutions and lenders. Equity financing is financing through investments in your business venture where the investors will be ready to invest the money in return for some royalty or a share of ownership in it. Angel investors and venture capitalists are prominent examples of equity finances.
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