Here's How To Fund A New Business, Even When Cash Is Low

Starting a new business is fun and exciting when you're in the beginning "idea" stage of things, but stuff gets real when you have to actually put some money behind it. Securing cash to help launch a business venture is arguably one of the largest hurtles an entrepreneur can face. The lack of financial backing is often what prevents people from truly reaching their dream of having a business. So if you're just starting out with a small business of your own, and you're wondering, "How can I get funding for my business?" here's some cash-seeking tips from industry experts.

Entrepreneur and motivational speaker Brett Gleason writes at Forbes that, when beginning a small business it is important to be open minded to different avenues of obtaining funding, and to stay positive and focused on your funding efforts. This includes, as Gleason explains, accepting the possibility that you might have to self-fund your business when starting out. A tough pill to swallow at first, to be sure, but this is certainly a reality many business owners have faced.

In fact, funding a startup yourself seems to be the trend these days, as Entrepreneur states over 90 percent of startups are self-funded. Gleason elaborates by suggesting how you can self-fund using savings accounts and zero interest credit cards, for example. In his opinion, "If you believe in your vision and have an absolute refusal to accept failure as an option, you should feel comfortable investing you own money into the business." Note: As the website cautions, if you go the route of using a credit card to fund your business, make sure to do so responsibly, or risk ruining your credit score.

Once you've exhausted (responsibly of course) your own personal resources, its time to think about soliciting family members and friends for help. Again, it may feel a little weird at first to ask for financial commitments from people you love, but according to Entrepreneur, professional investors will expect for you to have already obtained backing from those nearest and dearest to you before you've approached them. As startup mentor and Angel investor Martin Zwilling writes for Entrepreneur, "If your friends and family don’t believe in you, don’t expect outsiders to jump in."

There's also the good, old-fashioned bank loan you could apply for to help fund your business. explains that despite stricter lending standards from banks, there are still banks such as J.P. Morgan and Bank of America that have set aside additional funds specifically for small business lending. You should, however, be realistic about the type of business you have before seeking a loan. As Entrepreneur explains: "In general, this won’t happen for a new startup unless you have a good credit history or existing assets that you are willing to put at risk for collateral."

And unless you've been sleeping under a rock these past years, you're most likely familiar with Kickstarter. Who hasn't been solicited by friends of friends for financial backing for their "passion project" (i.e. a short film about the first person to have ever eaten lobster) to help them meet their goal, right? The truth is, crowdfunding sites like are great (and low cost) ways to get funding for a project or business that you're trying to get off the ground (especially if it is a creative one). As points out, Kickstarter works best if you already have a robust online social network, so if you're one of those "I don't do Facebook" types, this avenue is not for you.

There are of course, other options when it comes to seeking funding for your business, depending on the level of business you're working with. For a business that is further along in development, CNN Money recommends trying an "angel". Angels, according to CNN, are "private, high net-worth individuals who generally invest anywhere from $50,000 to $2 million in companies." Typically, these private investors meet regularly to hear presentations from entrepreneurs seeking funding, and then give money jointly to businesses. As CNN Money points out, however, angels these days tend to seek out businesses in much later stages of development.

Venture capitalists work similarly to angels, in that they don't often invest in startups or beginning-stage businesses, but this option is truly of the "pie-in-the-sky" variety. William Bygrave, professor of free enterprise at Babson College in Wellesly, MS, tells CNN: "You have a much better chance of winning $1 million in the lottery than raising venture capital for a startup."

Starting a business requires commitment, drive, ingenuity, and flexibility. If you're seeking funding for your business, you'll likely have to hit a few dead ends, and explore multiple options, before gaining momentum. But if you are truly passionate about what you're doing, and willing to invest in yourself, others will see the value in what you're offering and be eager to help you see your vision come to life.

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