4 Creative Ways to Fund Your Business Without Taking Out a Loan
In 2016, Noelle Santos had the dream of opening a bookstore and wine bar in the Bronx. Although she had a great vision, it would also take hardwork and hustle to make her dream a reality. As someone with no working capital, Santos had to find funding for her business. And so she entered local business competitions and participated on crowdfunding to raise money for her bookstore. And in 2019, the LitBar opened.
For some entrepreneurs, it’s not easy to receive funding from traditional sources like a bank or the Small Business Administration. Lenders require a business to be established and turning a profit before they will even be considered for a loan.
However, for entrepreneurs who are willing to roll up their sleeves and do some research, there are many ways of funding a business. In some cases, this funding will not have to be repaid–saving a new business tons of money in the long run.
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Here are some creative ways to fund your business without entering a bank:
In 2017 Santos launched a campaign on Indiegogo and raised over $150,000 for her venture.
Sites such as Indiegogo and Kickstarter are great platforms for entrepreneurs. These sites provide the opportunity to raise capital as well as introduce your product, gain feedback and receive support.
If you are a creative looking to fund a content-heavy business, Patreon is a great platform to raise recurring funds.
Get Competitive and Share Your Vision
Santos began gaining a following for her business idea by participating in the New York Public Library’s Start-Up! Competition. She used her earnings to purchase supplies and inventory to participate in pop-up shops, which helped her build an audience and working capital.
If your not afraid of a challenge, why not enter a small business competition? Many local organizations as well as state agencies and private businesses host business challenges for entrepreneurs.
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Shark Tank is also a popular television program that places entrepreneurs in front of investors who can make funding offers. Even if they don’t get funded, the exposure is phenomenal. Just sharing their business has provided many participants with instant recognition and often piques the interest of other investors.
Even better, many of these competitions provide startup support as you move from brainstorming to making your idea a reality.
Host a Presale
If you are in the process of bringing a product to the market, why not host a presale? You share your product and offer a discount to anyone who purchases before you launch the product.
The beauty of presales is that in addition to having capital on hand before your product launches, you can begin sharing on your website or social media sites. You can gauge interest in your product and build your social media following without spending a ton of money.
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Join an Incubator
Besides capital, entrepreneurs need to constantly network and receive support. Business incubators assist startup businesses in a variety of ways. Incubators use a network of industry knowledge and financial connections to provide entrepreneurs with support. This support covers areas like financing, marketing, coaching, accounting, legal and business operations.
While some incubators provide services for any small business startup, others specialize in particular industries. The Global Development Incubator, for instance, focuses on supporting social entrepreneurs.
The key to gaining funding for your business is to share your value. Developing your business in creative ways will help you prepare to pursue more traditional funding opportunities down the line.