Pursuing The Dream: 5 Unique Ways To Find Funding For Your Business Startup

Starting a business is a dream that many people have, but few people actually end up achieving. Part of the reason for this is the fact that most businesses require a fair amount of money to get off the ground. Finding funding at the outset of a business venture can be difficult, but it is a crucial part of getting your startup going and ensuring that it eventually reaches profitability. Here are five unique ways for you to find business funding without going to the bank for a loan.

Try to Find a Business Partner

If you have a good enough business plan, you might be able to attract a business partner into your venture who can supply the necessary funding to get it off the ground. Taking on a partner can also give you access to a greater pool of business expertise. The trade off, however, is that your share of the profits will be smaller when the business is mature. If you’re okay with lower future returns in exchange for a better guarantee of reaching profitability in the first place, finding a partner with the means to fund your business may be the right path for you.

Go to Family and Friends

Some business plans don’t take as much startup capital as others. If yours requires only a small amount of initial funding, you might consider approaching family and personal friends to loan you the money for it. Of course, you’ll have to guarantee repayment with interest, regardless of the success or failure of your business. If you go this route, be sure to borrow only what you absolutely need, as this will make timely repayment easier down the line.

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Explore Peer-to-Peer Lending

If you need a larger loan but don’t want to go through a traditional banking institution, a peer-to-peer loan can be a comfortable middle ground. In peer-to-peer lending, groups of individual lenders pool their resources to fund loans for which they will then receive interest during repayment. This results in better returns for the lenders than a bank savings could deliver and lower interest rates for those seeking loans.

Consider a Short Term, Nontraditional Loan

Depending on the exact needs of your business, a small loan with a short repayment time may be enough to fund your business at first. If this is the case, you can consider looking into nontraditional loans, such as payday advance loans. Such loans are easy to get and won’t burden your business with debt for years on end, but will only be available for comparatively small amounts. Be sure you know in advance how much money your business really needs to get going. These loans are also excellent for those with limited credit histories, as they often have no credit requirements to secure.

Use Your Tax Refund

If there’s no way for you to get the money you need by borrowing it, you can always get started using your annual tax refund. The average American receives about $3,120 as a refund at the end of each tax season. Though a small investment, this should be enough to at least get you started in most small business models. Even if it isn’t, consider using your tax refund as partial funding for your business and cutting down on the amount of money you need to borrow elsewhere.

Funding a business without a major bank loan can be difficult, but it is most definitely doable. Explore these possibilities and see which one will give you the best terms on the amount of capital you need. In some cases, you may need to mix different funding sources to get the full amount of money your business requires to get started.

Lizzie W: Lizzie Weakley is a freelance writer from Columbus, Ohio. In her free time, she enjoys the outdoors and walks in the park with her three-year-old husky, Snowball. You can find her on Twitter @LizzieWeakley.

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