Sources of funding to consider for your startup in New York

| Jun 18, 2021 | Business Formation |

After you have a business plan, you need to get the funding to launch your business. If you don’t have enough of your personal money to start the business, you can secure funding from different types of lenders or crowdfunding.

Business credit

Business credit cards give you a line of credit for business expenses. Most lenders check your personal credit before issuing you a business credit card if you don’t currently have business credit. Like personal credit cards, many business credit cards offer perks like spending bonuses and cashback on certain purchases.

SBA microloans

SBA microloans could give you $500 to $50,000 in funding. Lenders offer mentorship to borrowers, which is another benefit of obtaining an SBA microloan. When you’re new to business, it’s helpful to have an expert guide you. The downside of SBA microloans is it that may take some to receive approval.

Equipment financing

If you are seeking funding for equipment, one option you have is to finance your equipment. It’s simple for many entrepreneurs to obtain equipment financing because the products act as collateral. Many lenders don’t require that you have a business history. It may be helpful to ask your attorney to look over any financing contracts for you.

Crowdfunding

Crowdfunding is a popular way of gaining funding for startups because you don’t have to pay back the money like you do with loans. Everyday people who want to support your business idea may donate their money to you.

During the business formation and planning stage, you might want to set up a crowdfunding account to gather funding that you won’t have to pay back. Even if you don’t raise enough capital for your startup, you won’t have to borrow as much through other sources.

Read the guidelines of your crowdfunding platform carefully to stay within the rules and ensure that you get to keep the money. Some campaigns only give you the money if you reach your target. Others still give you the funding if you fall short.

Approach securing funding for your startup with a persistent mindset if you are certain that your business has a high chance of succeeding. It’s possible to get a rejection, but you can try different lenders and sources to gather the funding you need.