Obtaining finance for a business is a daunting task. And for solopreneurs, it becomes a bit more difficult, as they have to manage other aspects of the business as well, along with scouring for financial assistance.
Most solopreneurs have very limited savings, and since they are just starting out, have less credibility too. Also, interests are high in the case of bank loans, and there is a lack of collateral. While larger businesses have greater access to finance, how can a solopreneur fund his or her own startup?
Here are some unchartered ways by which solopreneurs can obtain funds and also build credibility.
1. Using Business Credit Cards
While a solopreneur may not have the required time to obtain the desired financing for a business, opening a business credit card ensures some relief. Banks, on new applications, offer introductory zero percent interest rate on the same, which helps in funding early-stage of business.
2. Using invoice financing
Often undertaken to meet short-term liquidity needs of business, invoice financing allows the solopreneur to receive funds that may be held up by the client, and is payable through a financing company to negotiate an exchange.
One can avail of a large percentage of the total fee and the remainder can be welcomed when the client finishes the job.
3. Buy Now, Pay Later
Outsourcing payment of sales is another way of accumulating funds for solopreneurs.
Schemes like ‘Buy No Pay Later’ allow buyers to place orders with the added facility of paying over a duration of time. It also allows immediate availability of money without the risk of credit.
4. Use a personal loan service
Almost all banks require collateral to secure business loans. And opening a personal loan with a bank that offers competitive interest rates, gives the required boost to funding financing of a startup.
Crowdfunding not only helps collect funds for business, but they also help raise its visibility. Engaging crowds to help fund projects, experiments, and businesses, especially with dedicated sites like Fundable and Ketto, builds engagement. This increases customer loyalty.
Suggestions to Keep Going
While these were some ways by which a solopreneur can raise funds, certain points also need to be followed to ensure optimum utilization of financial resources.
Savings are indispensable to ensure the smooth running of businesses, even when times are rough. Also, keeping receipts of businesses helps while claiming tax deductions, thereby reducing businesses’ taxable income.
Also, understanding business and financial expenses, without overspending, along with consistent tracking will help business go a long way.