5 Creative Ways to Fund Your New Business explained by professional Forex trading experts the “ForexSQ” FX trading team.
5 Creative Ways to Fund Your New Business
While banks like to roll out press releasesannouncing their commitment to lending to small businesses and patting themselves on the back for the amount of small business loans they’ve already provided, the truth of the matter is: they don’t like to do it. So they don’t much.
Of course, if you want to start a small retail or service business, or have an idea for a product you want to develop from scratch, I don’t need to tell you this – if you’ve been to a traditional lender, you already know.
If you have lots of collateral and a good credit record, they might make you a personal loan. But an actual business loan that’s not tied to something like your mortgage? Forget-about-it.
But if you’re determined to get your new business off the ground anyway and have already tapped out all your friends and family, here are some non-traditional ways of business funding you may want to explore.
Putting your idea for your new business up on the web and asking people to donate money so you can go ahead and do it is an increasingly popular way for new businesses to get funded – and there are a growing number of crowdfunding portal websites where you can post your business idea and campaign for funds.
The two biggest crowdfunding portals in Canada are Kickstarter and Indiegogo – see how they compare.
2) Startup accelerators.
Startup accelerators or incubators can be a great way to fund your business as most of them provide education and mentoring as well as money.
Companies such as 500 Startups and the Founder Institute nurture and support new businesses around the world.
Here’s a breakdown of Canada’s Eight Biggest Startup Accelerators (TechVibes).
The downside is that startup accelerators are very much a tech phenomenon ; you’ll be hard-pressed to find such opportunities for businesses in more traditional arenas.
Another potential downside is that accelerators offer investment in exchange for equity and you may or may not want to share ownership of your new company.
3) Compete for funds.
Every year it seems that there is an increasing number of contests that offer money to businesses as a prize.
The best of these also offer things such as access to expertise and training that can make all the difference to a new business. For example, Ignite Capital offers aspiring Canadian entrepreneurs the chance to win a $20,000 grant and mentoring for one year. (Catch: the program is only open to Ontario residents who are 18 to 39 years old.)
The Canadian Youth Foundation’s Big Ideas Lab is a similar program which offers access in up to $75,000 in funding.
But there are other contests that are open to just about any Canadian small business, including startups looking for funding. Telus and The Globe and Mail sponsor an annual Challenge Contest, for instance. Its grand prize is a $100,000 grant.
4) Business to business financing.
Some companies are financing other companies as a way to increase the reach of their own products and secure their supply chains. For instance, Whole Foods Market Inc., a U.S.-based chain of natural and organic foods, loaned Molly B’s Gluten Free Kitchen, a Toronto-based family business, $50,000 to buy a commercial oven the Canadian small business needed to expand.
(Read the story in The Globe and Mail.) The loan was part of Whole Foods Market Inc.’s Local Producer Loan Program.
And Whole Foods is certainly not the only company offering financing to other businesses. Companies such as Amazon.com Inc. and PayPal are also lending to small companies – and the trend is growing.
5) Franchise financing.
If the new business you want to start is a franchise, you may be able to get the small business financing you need from the franchisor you are going into business with. Instant Imprints Canada and Murphy Business Canada are two franchises that offer such financing and they’re just the tip of the iceberg.
(Franchises generally are easier to finance than other startup businesses as there are more traditional lenders willing to loan them money. Companies such as ATB Financial, a crown corporation, provide specialized franchise financing services.)
One Size Doesn’t Fit All
Some of the funding ideas above still require you to have the kind of credit rating you have to have to get a bank loan. Others, such as startup accelerators, are only open to new businesses in particular sectors. But no matter what kind of business you want to start, the ideas above will at least give you some funding avenues to explore.
Where to From Here
Before you start your search for funds, you may also want to read these articles:
- 10 Things You Need to Know About Small Business Funding in Canada
- How to Find an Angel Investor
- How to Get a Small Business Loan
5 Creative Ways to Fund Your New Business Conclusion
For more information about currency trading brokers visit TopForexBrokers.com Forex brokers comparison website, Tip ForexSQ.com foreign exchange trading experts please by share this article about 5 Creative Ways to Fund Your New Business.