… Of the things that scare many off the path of entreprenuership, the task of securing startup capital is cheif among them. Before many even think of failure or the difficulties of running a business, the crux of the problem is money that comes first.
The good news is, many of the barriers you may believe exist in securing the capital is no longer existent.
1. People Won’t Lend you Unless You Have a Solid Business Plan
While a business plan is generally beneficial for the future of your startup, its no longer necessary when securing funding. Alternative lenders often only need proof thta your business is viable. A steady revenue stream should be enought to convince many of them to give you the capital you need.
2. Ask for Little.
Part of planning your small business’ future is planning the amount of capial you need. This should cover everything, from manufacturing to paying employees before the revenue starts coming in. It will also need to account for when the company is still losing money.
Despite this calculated number, many still hesitate to ask for the full amount needed when approaching a lender. Often it is because they think the lender is not going to give that much money to a startup, while that may be true in some cases, not asking for a full amount just hampers your company and many may keep you from paying back the loan.
3. Startups are too dangerous
Modern investors are far too more cautious than when they were before the recession, which is understanable. Forturnes were lost. However, people have recovered from that fear. Lending is back is full swing, with over $9 trillion in loans today. It is gotten easier to securing funding from banks and investors as a startup, and even if traditional capital sources fail you, online lenders are still an option.
4. Online lenders are unturstworthy
Whenever something new comes along, scammers are there for the ride. That’s what happens with the internet. When it was new, scammers were everywhere, from spam emails to falling online lenders ho demanded upfront payments as “proof” that you could pay back your loans.
While scammers still exist, online lending is safer than ever before for small buisness. Online lenders have now access to software thet makes it easier for you to apply for a loan safely, without having your information compromised. That isn’t to say that you shouldn’t practice basic safety or do your due diligence. It just means you shouldn’t cross them off the loan option list.
5. Perfect Credit is Mandatory.
While you do need a good credit score, it doesn’t need to be perfect to secure a funding for your startup. Lower credit scores can limit your loan options, but if you are in luck lenders are everywhere. If you can present a strong business plan, proof of viability, or ideally both, you should stand the chance of securing a good loan. Crowdfunding experts, for example, are far more interested in the concept of your vision for the real world than your score. The same can be said of the many venture capitalists.
Entreprenuers are everywhere, now because its easier than ever before to secure funding. That said, it doesn’t mean you can just walk into a bank with an idea and still expect to walk out with a bag full of cash. Getting capital still comes don to having a great idea and a proof of viability.