So you have it. You’ve got the best idea for a new product or service, and you may even have a cofounder. However, there can be a huge obstacle standing in the way of your idea and actually putting your idea on the market. Unfortunately, this can lead to businesspeople borrowing a hefty sum of money to start a business. But never fear! Below are some ways that you can acquire the necessary startup capital to fund your business.
Tap into your savings
You may not have a ton of money in your checking account, but what about your savings? According to the nonprofit association SCORE, around 78% of people who were starting a business didn’t seek financing other than their personal savings or job income to get their business off the ground in the first year. If you don’t have savings, figure out a way to get a hefty amount, like selling your house and buying a less expensive apartment or selling your car and using public transportation.
Tap into your retirement fund
Most likely, if you’ve exhausted all of your other options, a good option would be to borrow money from your assets, such as a 401(k) or an IRA savings account. This should be your last viable option, as it isn’t the most risk-free. One of the good things about this is that if you’re pitching to investors and mention that you tapped into your own retirement fund to fund your project, it may make your business seem more attractive to your investors as you took a personal risk and stake in your business.
Apply for a grant
Honestly, there’s nothing better than free money that you can use to fund your startup. However, being awarded a grant for your business is no easy task, which is why you don’t hear about it happening. When looking for a grant, there are a number of different kinds to look at and research, including federal grant programs, state and local government grant programs, and even private grant organizations.
When looking to obtain a grant, you’re going to want to find the program that’s invested in your section of the industry or even see if you fit the subset of the population for a grant. Some grants can be awarded to veterans, women, and single mothers, to name a few. You have to write a pretty extensive and detailed proposal of your business if you want to have any hope of being considered for a grant. Competition is tight for these proposals, and it’s like the Hunger Games. Only the best win.