How to Fund Your Startup Business Idea

Not just in the least developed countries but all over the world, unemployment is getting worse and worse by the day, and the only people who are making it financially are people who are high-ranking government officials or business owners, but not all business owners but those who are selling day-to-day basic products that are a necessity for survival.

So I understand why you want to start your own business. But starting a business requires money, and there are many ways to get your business funded, some of them traditional, like borrowing money from family or taking out a bank loan. But lately, there has been news that getting your business funded, whether it is an idea or already a start-up, can be done.

So if you have been asking yourself how to get funding for a startup business, in this article we are going to cover ways on how to get your funding and which strategy is best suited for you.

1. Pursue a grant

Grants are mostly given by organizations or the government and are basically free money. This money is given to people who want to start their own business but do not have the finances to do so. It is not like a loan because you don’t have to pay it off.

Like I said, with the economy in shambles and everybody just trying to make a living, some are doing it online and some are starting businesses with money, but mostly like you without, so expect a lot of competition on those grants because a lot of people, some with better business ideas, will be applying, which is a better alternative than getting a loan while in debt.

Most peferred per country

2. Crowdfunding

Is using social networks and internet popularity to raise funds, done simpler and digitally, making it less of a hustle, and can almost raise funds for everything worth caring about as your donors. They are just random people, family, and friends feeling pity or the need to help, and everyone can use them to raise funds.

You can use social media platforms like Facebook, TikTok, Instagram, and WhatsApp to advertise your campaign, acquire engagement, and spread the word, helping people reach you easily. Obviously, when making a campaign to raise funds, it needs to be persuasive, heartwarming, and motivate pity.

Competition is a challenging factor when it comes to crowdfunding, with thousands of people looking for funding, maybe some with the same ideas or stories you have, so effectively marketing your campaign and exposing your campaign can help you raise as much as you need.

3. Family and friends

Every time you have money problems, the first thing you think about is borrowing money from your family or friends. This method is an informal way to borrow money for a startup without paper work,  meaning there are no terms and conditions, or interest in the money borrowed, and they even lend you a hand with your business and some advice when things get hard and challenging.

With the potential of ruining relationships because of being unable to repay the money you borrowed, and if that is a problem for you, losing your family and friends, then this will maintain trust and love. When you can’t pay back, you can do it by maintaining clear communication, honesty, and positivity, and by showing great motivation to pay back.

4. Get an angel investor on board

These investors are wealthy individuals who are willing to invest in financially promising startups and small businesses, so they provide expertise, financial help, and their vast connections, so your business has a higher possibility of making it.

Your relationship with an angel investor has the possibility of becoming a long-term one or for life, and with their experience in the business industry, they have valuable advice, are great mentors and can help attract other investors if you want to grow your business to new heights.

Online platforms to find angel investors

1. Angellist
2. Gust
3. Investment network
4. Golden Seeds
5. Envestors
6. Lagos Angel Network
7. Equity
8. Passion Capital
9. Republic.co
10. jozyangels

5. Bank Loan

Unlike most of the methods here, this one requires a little more from your side, and as a person who is looking for financial aid, some of the requirements here you won’t possess, like good credit and collateral. That being said, you have to have a solid business plan to qualify for a loan.

with advantages like low interest rates, repayment structures, and the potential to build a good relationship with the bank so that if you may need another financial help, they can help you in the future, but obviously there are some disadvantages, like failing to repay, which can result in repossessing or seizing your assets and damaging your credit.

6. Micro Finance

These are small financial providers who provide small business owners with small loans. Obviously, as a start-up, your profits won’t be that much, so these microfinance companies focus on these types of businesses. They give you money for your startup and help you grow your business.

They require you to have a bit of savings or collateral, and their interest rate is a bit high compared to a bank loan. They also offer a limited service compared to banks, and they are not as involved in your business as a bank.

1. USA- Kiva
2. SOUTH AFRICA- WesBank
3. CANADA- CMEG
4. INDIA- Equitasbank
5. PAKISTAN- Apna Bank
6. FRANCE- Banque de france
7. ITALY- Fi-compas
8. NIGERIA- Central Bank of Nigeria
9. CHINA-  Asia Development Bank
10. JAPAN- JETRO

With this many opportunities to get your startup business funded, surely one of them can work because obviously each of them has its own requirements, and you are bound to qualify for one or two, but if you qualify for more than two or all of them, you can assess the potential risks and benefits of choosing the best one for you.

Maintaining a better relationship with your landowners, such as banks, family, and friends, can help you in the long run if traditional methods are not working. You can consider the digital paths by using online platforms and social networks to maximize your reach and chance of success, and remember that having a compelling pitch and business idea is essential.