What is one alternative funding idea worth exploring for new businesses?
To help you find smart and efficient ways to fund your new business, we asked financial experts and business leaders this question for their best funding ideas. From seeking out small lenders and partners to raising capital with equity and crowdfunding, there are several great tips that may help you fund your new business.
Here are eight alternative funding ideas worth exploring as a new business:
- Small Lenders & Partners
- Angel Investors
- Incubator & Accelerator Programs
- Corporate Sponsorships
- Equity Crowdfunding
- Government Grants
- Venture Capital
Small Lenders & Partners
Look to smaller partners. Oftentimes, the first and only place entrepreneurs seek fundings is through traditional banks. If you have gone that route, you already know how difficult it is to get funding through banks as an LLC. Instead of continuing to be hit with nos, look to smaller lenders and partners such as our company Charter Capital. Our family-owned business can partner with and help you navigate the complexities of funding.
Carey Wilbur, Charter Capital
Angel investors are one way to get funding for new businesses. These are people with a ton of money and interest in investing in start-ups, so you’re going to want to get them on board right away. Not only can they help you financially, but they can also offer mentoring or advice which is just as imperative for new businesses.
Guy Bar, Hyfit
Incubator & Accelerator Programs
Incubator and accelerator programs are good funding options for small businesses. These programs help hundreds of start-up businesses every year and run 4–8 months. Incubators provide shelter tools and training and network to a business. Accelerators help businesses take the giant leap. You can also have the opportunity to make good connections with mentors, investors, and other fellow startups with these programs.
Derin Oyekan, Reel Paper
Attaching an idea to a corporate sponsorship can instantly secure funding for a new business, as well as help validate an initiative. For example, back in 2007, I searched for corporate sponsors to fund a 16,000 mile, 38 state RV road trip where my friends and I would interview 300 people about their career paths. We searched high and low for sponsors, picking up some minor successes with energy drink companies and striking out a lot with media companies like the MTV show Pimp My Ride. After three months of searching, we finally found our title sponsor in a locally-based job board, which helped fuel our road trip and fund our business. When in doubt, try to think about aligned partners and get creative about how to approach them for corporate sponsorship.
Brett Farmiloe, Markitors
Not everyone needs millions in venture capital. Instead of taking that route, bootstrap your business. Minimize your business costs and have a side hustle to pay your bills. Then, once your business takes off, it’ll be much easier to get VC money.
Kylee Guenther, Pivot Materials
We are currently exploring the potential for equity crowdfunding as VCs have been reluctant to invest in our business. This is often due to my being disabled (vision-impaired), a female co-founder, and our business targeting accessible and inclusive travel. Equity crowdfunding can offer a real alternative to help us get established. We want to show that our business can truly succeed, and this option offers a great opportunity.
Dale Reardon, Travel For All
One alternative funding idea worth exploring for new businesses is government grants. Unlike other sources of funds for businesses, government grants do not need to be repaid. Traditional sources of business funding from institutions like banks and other financial bodies come with a lot of strings attached. Governments and non-governmental bodies provide grants to help businesses and to stimulate the economy. For a new business, not having to worry about repaying a loan or pay interest on it is a significant advantage. Grants are gifts and, therefore, free. All a new business needs to do is meet the grant condition.
Nonyerem Ibiam, Law Truly