If you have a business idea and you are ready to seek funding to bring your idea to life, you have many options to choose from to finance your ventures. This post covers 4 less popular startup funding options.
While the obvious startup funding options include tapping into your personal savings, applying for credit cards, and pitching to outside investors, there are many OTHER options that you might not be aware of.
Recent regulatory changes have brought alternative funding options to entrepreneurs to make startup funding MUCH more easy.
In fact Fundera recently released this graphic of the top alternative lenders in the space today.
Now…we know you’re ready.
Here are 4 lesser known ways to fund your startup today!
Crowdfunding has evolved from pre-selling a $20 product online to early-adopter customers to now selling shares of your venture to investors around the world.
While the competition is high, new equity crowdfunding platforms such as Seedinvest, CircleUp, and Fundable allow both accredited and non-accredited investors (each site has different requirements) to invest into actual shares of startups that can someday turn into real wealth.
These win-win platforms open many successful startups up to capital from everyday people, not just the professional investors or banks of the past.
#2 SBA Loans
SBA loans are government-backed loans designed to help startups and existing businesses get access to capital that they otherwise would not have available to them.
Some SBA lenders offer pre-approval in as little as 48 hours and loan closing in as little as 14 days from application.
While SBA loans feature startup-friendly terms and predictable interest rates, SBA lenders do require good credit scores (650+), borrower collateral and down payments, and detailed application to get approved.
This means that you need to have a high personal score and assets that you can pledge as collateral.
Have bad credit?
The game isn’t over!
You can always get a co-signer to borrow alongside you to help you get your SBA loan approved.
#3 Retirement Savings
A rollover for business startups (ROBS) is a way to invest funds from your retirement account — like a 401(k) or individual retirement account (IRA) — into your business without paying early withdrawal penalties or taxes.
A ROBS isn’t a business loan or a 401(k) loan, so there’s no debt to repay or interest payments to make.
If you have at least $50,000 in your retirement account and you would rather invest into your own venture than the public stock markets, the ROBS option is a good bet for funding your venture.
#4 Government Grants
If you are a technology-based company there is a good chance you have heard of government grant programs as a means to fund a new product or service.
Agencies like the SBIR request applications from for-profit companies for grants, typically starting at $150,000, with the opportunity to get larger grants over time as the company proves it can develop and commercialize the technology with the SBIR money.
If you are building technology and believe that government support in the form of grants, or being a customer, would help you, check out SBIR grants today.
We hope this list of the 4 lesser-known startup funding options helps you get your business closer to getting funded!