• Blog

How to Get the Funding You Need for Your Startup



All new businesses will face startup costs, ranging from office space and equipment to marketing research and legal matters. These costs can run into the tens of thousands of dollars, and few people have that amount readily available to them. Luckily, there are several avenues for getting the funding you need.


Apply for Loans

Business loans are a common way to fund startups. Many lenders will offer business loans backed by the U.S. Small Business Administration. To be eligible, you will need to show a sound business operating plan and demonstrate an ability to repay the loan.


Rather than loaning a specific amount all at once, a business line of credit allows you to access money only as you need it and pay interest only on what you've used. However, you may have to meet requirements such as a minimum time in business, annual earnings, or credit score.


Raise Capital

If you're starting from scratch with an idea, you may not qualify for a loan at first. In that case, you might want to find investors. Asking family and friends is a possibility but carries with it the risk of relationship tensions. If your business idea is likely to make a huge impact, you can try attracting angel investors or venture capitalists.


Whoever your investors are, they will expect a return on their investment. The right business structure can be helpful. A C-corp structure allows you to offer equity to outside investors. You can also accept as many investors as you want.


Find a Partner

On a smaller level, a business partnership may be advantageous. A partner can provide additional funds for your startup as well as ideas and insights. It is possible to have more than one partner, but you should protect the investments of all partners and clarify decision-making with a legal agreement.


The laws for forming a partnership vary by state, but some possibilities are the limited partnership or limited liability partnership. The agreement should define the roles of each partner and specify the percentage of ownership for each investor.


Funding your startup can take time and involve complicated paperwork. You can make it easier by organizing your business structure and completing preliminary steps like market analysis and financial projections. This demonstrates to potential lenders, partners, or investors, that you have an effective plan for making your new business a success.


Check out this article on the key relationships that startup founders need to build!

12 views0 comments