You’ve decided to start a new digital business. Congratulations, this is a big and exciting step forward. While there are many uncertainties surrounding your decision, nothing changes the fact that you’re doing your best to take a step in the right direction regarding your career.
Among the many questions you need to answer are those associated with funding your new digital business. Without enough money, you may soon find that your business is struggling and you’re wondering how you’ll keep it afloat.
But don’t worry. There are plenty of funding sources for your new digital business. You simply need to know where to look and how to proceed. Here are five of your best options.
Your savings account
This is often the best place to turn for funds when starting a digital business. Since you’re relying on cash, as opposed to a loan, there’s nothing to repay. This doesn’t mean you should spend recklessly, but it does mean that you’re taking less of a risk with your overall financial health — and there’s something about that that will give you peace of mind.
Small business credit card
You don’t want to bury yourself and your new business in credit card debt, but you should consider this financial tool one of the better ways to fund some purchases that you need to make. For example, you may decide to use a credit card for office equipment and supplies, travel, and entertaining clients.
Tip: with so many small business credit card offers to choose from, be sure that you compare a minimum of three to five. This is the best way to ensure that you’re getting the card that’s right for you.
Maybe you need a small personal loan to get you off the ground. Or perhaps you need a large personal loan to take your company to the next level. Either way, look into this funding source.
There is no shortage of benefits, such as:
- A personal loan is unsecured (no collateral required).
- A personal loan can have a competitive interest rate, based on your credit.
- A personal loan is available in a variety of terms.
If you’re interested in learning more about a personal loan, start your search online. This is preferred over visiting a local lender, as it positions you to secure a loan with the best possible terms and conditions.
Home equity loan
A home equity loan is exactly what it sounds like. You borrow from the equity in your home with the idea of using the funds to launch your new digital business.
The primary point to remember is that a home equity loan is secured by your house. So, if you default on the loan, you put your home at risk of foreclosure.
Of course, there’s some good that comes from that. With collateral comes the opportunity to secure a loan at a lower rate, which saves you money every month as well as over the life of your loan.
Friends and family
Some people feel comfortable doing this while others would rather not ask friends and family for money. If you’re okay with this idea, make a list of people who may be willing to assist you. Then, write down how much money you need to borrow and the terms and conditions for doing so.
There are a lot of risks involved if you take a loan from a friend or family member. At the top of the list is the fact that you could default on the loan, which puts a strain on your relationship. Also, your loved one may not approve of the way you use the money, which also puts you in a compromising position.
It doesn’t matter if you’re starting an ecommerce business, launching a blog, or becoming a marketing agency owner, you must have a clear idea of how much money you need to get up and running. And of course, you should attempt to project your financial requirements for the weeks and months to come.
If you make all the right moves early on, it’s easier to manage your new company’s finances. This puts you in a position to focus more time and energy on growing your business.