Ideas are a dime a dozen, so what sets you apart is your ability to fund your business ideas and bring them to life.
However, securing funding isn’t the easiest thing to do, and getting a bank loan is even more challenging nowadays.
Here are seven effective alternatives to help you fund your startup without a loan:
This is one of the most hassle-free ways to secure funding for your business idea.
You’d have to make a significant investment into your business from your money and keep funding as you go with the entire profit from the business.
The caveat here is that you’d have to deny yourself a salary for a while until the business gets on its feet and can sustain itself.
2. Take Advantage of Entrepreneurship Funding Programmes
These are competition-based startup programmes that challenge you and thus, help you to come up with the most viable business models and win a prize for doing so.
An example is the Tony Elumelu Foundation grant prize which awards up to $5000 to entrepreneurs. Search for such programmes and take advantage of them to fund your startup.
3. Secure A Partnership
They say two heads are better than one, which is true even in business.
If you have a great idea but no money, why not team up with someone to fund your business idea? Again, you must have a solid profit model.
The important thing here is to make sure that the terms of the partnership are clearly expressed in writing and agreed on by both parties.
This involves you pitching your idea on open platforms such as Kickstarter, DreamFunded, Rockethub, or Onevest for members of the general public to fund you.
Capital comes from donations or in exchange for rewards or equity in the business.
However, this channel relies heavily on the quality of your campaign and how much you can get people to trust you. Do this by consistently giving people updates on the project.
5. Friend and Family Lending
If all else fails, you can always go back to your family and friends for a helping hand.
The downside of this method is that relationships could go sour if promises are not kept. This means that you as a lender should show integrity and return the money when due.
Generally, it is a good idea for both parties to express their terms clearly in writing before the money is given out.
6. Private Investors
These wealthy individuals or companies estimate your business model’s viability before they fund your business idea. They could be angel investors or venture capitalists.
The difference is, venture capitalists ideally go for already existing models with proven records, while angel investors are more willing to take a chance on startups in exchange for profits or equity.
Remember, the devil is in the details, so always ensure you reach a clear agreement on the funding terms.
7. Peer-To-Peer (P2P) Lending
This is an easier and faster alternative to lending from banks.
Here, the loan comes from individuals who agree to lower interest rates than traditional banks. P2P platforms include Surfin, P2Vest, Fint, KiaKia, and Ajobox.
As always, ensure you completely agree with all the terms and conditions of your lending before receiving money.
Funding your startup idea doesn’t have to come with the hassle and paperwork of getting a bank loan. Using one or more of the above channels should help you secure stress-free funding for your business.
IDEAS ARE MEANINGLESS WITHOUT A MASTERFUL EXECUTION.
– ALEJANDRO CREMADES
Our secure options help you maximize your savings and reach your goals with the best interest rates on the market. Visit www.overwood.ng today to get started.