How to finance your business without bank loans

There are numerous tools and options at your disposal on how to fund your business without necessarily obtaining bank loans or getting help from other investors. It’s very difficult to obtain loans from bank these days without collateral and even if you do, high interest rate will be attached to it. If you don’t have money to invest in your business, that should not be the end of it, there are various alternatives you can take to kick-start your business or to keep your on going business afloat.

Support from family and friends

Unlike a commercial organization or financial institution, family members and loved ones are more likely to trust you with their money. If your business is a lucrative one, they will be willing to loan you some money even without interest. But this option is obviously applicable to most people that have financially capable family members. 

Angel investors

This people commit their funds into your business in exchange for ownership of equity stake and they are known to require a very high return on investment. You can always find a business angel if you can put together a very high pitch with realistic growth and profitability projections.

Strategic investors

These are group of individuals that work for an organization that takes precautions towards investing in upcoming businesses. Most of them agree to invest in your business after going through your business plans or help you to maintain your ongoing business. They don’t just help you with funds; they also give advice and guides on how to improve your business strategies.

Business loans

You can easily acquire this type of loan if you produce collateral and a business plan that is of equal or greater value to the loan that you are requesting for. The interest rate charged on this type of loan is usually very high. Most people use their properties such as cars and houses as collateral to obtain this loan and risk loosing everything if they don’t pay back at an agreed period.

Sell your old stuffs

Have a closer look around you, and I’m sure that you’d see clusters that require clearing. You can easily raise some cash selling all the things that you don’t need any longer and at the same time free the spaces that they are unnecessary occupying.

Crowd funding

This is another tool that is very effective in raising capital for your business. There are numerous websites out there that provides easy as well as quick plat form to raise money. All that is essentially required of you is to ensure that your business idea is worth while.

Don’t quit your current job

Finally, I’ll advice that you should not quit your current job. I included this particular point in my previous article on how to start a business with little or no capital and I think it’s worth repeating. If you let your entrepreneurial drive lead you to quit your current job, then you’re approaching it the wrong way. Take advantage of your job and use a portion of the earnings to invest into your new business.

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