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To evaluate the best funding options for your business, weigh out the costs of each and take time to understand what your business needs. Evaluate which method best meets those needs with as little cost to your business as necessary. You might choose one method or you might need to combine a few to meet the needs of your business.
This is a great option for small business owners looking to get an idea off the ground. Sites like Kickstarter or Indiegogo are great sources filled with business owners looking to get funding for their idea(s). To return the favor, funders are usually offered early access to their products or services, avoiding the obligation of loan approval or giving up equity for their business.
This option may require you to give up some equity to your business, however, apart from getting a monetary investment this type of investor will also provide you with experienced input and advice to help you make well informed business decisions. In some cases, they may even pass on contacts that could help.
Bootstrapping involves using your existing resources to fund or invest in your own business. Using your own income and savings can be risky so to make sure your own resources don’t run out. Obvious perks would be not giving up your own equity, and if this method fails, you can always get a loan- but it’s worth a try to go for it without outside help.
There are a great many of these contests available to enter around the world, offering equity-free investors to winners. Depending on where you are geographically, this may be a useful method for your business. This method requires doing thorough research to see which contests are available in your region. Another option you can look into is grants, there is often a variety of funding available through grants ranging from funding for manufacturing to hiring new employees.
Third Party and Online Business Lenders
The new generation of business lenders that has emerged on account of the difficulty associated with obtaining a bank loan. Typically, business lenders charge an interest rate than a bank ‘prime’ rate, but often provide other valuable features. Generally, perks include faster funding times and less paper work.
You can find many of these lenders online, or simply visit YHEF.ca/contact-us to ask about our lending options!