How to get funds for your business if you are broke?

Mellorando

Banned
Having a big, billion-dollar idea for a new company or start-up is great—but now what? You probably need a website, a tech team, some office space, and, of course, at least enough cash coming in each month to pay your rent. Which means, you need money. Whether it’s a cool new app or a swanky café, most businesses and most entrepreneurs require at least a little bit of funding to really get off the ground in their early days.

1 Begin With Bootstrapping

When first getting started, many entrepreneurs use “bootstrapping,” which means financing your company by scraping together any personal funds you can find. This typically includes your savings account, credit cards, and any home equity lines you may have.
In many cases, using the money you have instead of borrowing or raising is a great approach—in fact, some entrepreneurs continue to bootstrap until their business is profitable. This can be beneficial because it means you won’t have extensive loans and monthly payments that bog you down, especially if you run into snags along the way.
But, if you’re looking to scale your business quickly, it can be advantageous to bring in outside sources of funding. So, what happens when your funds run out, or you decide you need something more? That will ultimately depend on the type of business you’re building, but there are some common places to start.

2 Consider Friends and Family

Asking your friends and family for money might seem like a daunting prospect—but tapping those closest to you is often a good first step before getting external funding. And hey, it can never hurt to ask. While Aunt Irene is probably not in a position to finance your entire new social network for dog owners, she may be impressed enough to toss you a couple grand to help you get rolling (and join the site to find Fido some new playmates).
Before you ask your friends and family for money, though, you should have a business plan at the ready. This way, you can explain to them exactly what you’re selling, what you plan on charging, how you’ll make money, and whether you’re asking for a loan, an investment, or a gift (i.e., whether or not they should expect to get back any money they put into your business, and if so, how much).

3 Explore Alternative Funding Sources

If you’re looking for a relatively small amount of money (anywhere from $25 to $5,000), there are quite a few micro-loan organizations that lend to start-ups and entrepreneurs, such as Kiva and Accion. These websites cater to low-income entrepreneurs in the U.S. or those working for social good (and some only provide micro-loans to those living below the poverty line). But if you think you might qualify, check out their websites for more information.
Another alternative are the increasingly popular crowd-funding sites, such as Kickstarter and IndieGoGo, which provide you a platform to raise money from individual, small supporters across the web. You’ll set up a campaign and name a target amount of money you want to raise, as well as create perks for donors who pledge a certain amount of money. Then, you raise money for the campaign over a specified time period. With Kickstarter, you’ll only get to keep the money if you raise the full amount of your goal, but IndieGoGo will let you keep anything you raise (for a cut of the proceeds). For more info, check out our guide to choosing between the two and maximizing your crowd-funding campaign.
 

Jasz

VIP Contributor
You mentioned the key ways of getting business startup capital. Getting money from family and friends is a good start before going external. The problem with this idea is how good is relationship with your family and friends, do they trust you to give you a large some of money, well you can task many of them in a little way if you want to achieve this as so many won't like to release huge amount of money if they don't believe in you are have anything to benefit at the end of the day. So you have to convince them too.

Taken loan from small financial organization like micro finance bank is a good one but you must be sure you have a good and feasible business idea. So you don't end up having trouble paying back as you won't find it easy with their counteraction at all.

Personal savings is the best of all. The problem is some persons don't have that much to gather.
 

Kingsley

Valued Contributor
Getting funds to manage one's business is quite different from getting money for a start up, when one is trying to get money for start up, it is always advisable not to borrow to start a business because at this time the business is still at the infant level and yet to acquire any shocks to withstand challenges, the owner of such business might suddenly goes bankrupt if their is a major challenge that hits the business at the infantry level. But a business that has been existing for some time can still access financial assistance because the entrepreneur managing such business must have acquired some level of experience in running the business, and that will enable him or her to utilise any funds that will be given.

In the case of accessing funds to manage the business there are alot of investors that are willing to assistance an existing business with funds to run a business. One might start off from friends and family members to acquire loans or one could approach commercial banks with a reasonable interest rate, or better still one could apply for loans or grants from governmental agencies. And also from other online loan applocations .
 

Good luck

Verified member
You can fund business if you are broke by talking to friends and family or close relatives to help you to raise some capital which can be in form of gift or loan that can be paid back in instalment but if the opportunity is not there to get from relatives,the only alternative Should be from the bank though the charges may be a little bit high but you will surely get the fund you need for your business at that particular period that you are broke and if the process is taking time you can just look for one of this online loan package
 
D

Deleted member 28127

Guest
Do not have the full amount of money do not mean that you are broke as most broke people could manage funds well if they start a business unlike people having a lot of money and pay lavishly for things.
 

Rachael

Verified member
One of the fastest way to fund a business is by obtaining loans but this way has a lot of pressure which is usually accompanied. I have seen cases where business owners took loans to fund or support their business and at then end of it, they get disrupted due to some unbearable challenges. There are creative ways of funding a business and this is not limited to any sort of loan adoption. Opting for potential investors is one ideal way of starting a sustainable business. Investors would always be willing to invest in any business which proves to have feasibility returns and when the business plan is well scripted, it would also make investors to access and foreshadow the level of productivity and sustainability.

Another way of funding a business which is the most preferable for me is through, the personal funding method. This method has to do with a process where the potential business owner has his own personal finances, with this, he does not have to rally out and source for money. Another way of sourcing for loans is through crowdfunding, which could be from the support of friends, the community we find ourselves or the society as a whole.
 

TOZZIBLINKZ

VIP Contributor
Not every country and regions of the world have their citizens financial and business welfare at heart , especially areas and regions that are considered to be in a developing state . In most regions of west Africa to be more precise Nigeria which is considered to be a developing country today with a government that does not have the interest and business and financial welfare of it people at heart , this is actually known because majority of people in Nigeria are jobless and broke and although a majority of them will want to have a business of their own but they are limited as a result of not having initial capital to start , implement , and establish the business of their choice .

Rather than waiting for the government to give you capital to establish a business , there are other ways that you can see capital to establish your business . Online investment has been a lifesaver in the accumulation of capital especially to open offline businesses . You can engage in online activities like freelancing , affiliate marketing , and drop shipping so as to earn commission for your services and gigs done which you can gradually accumulate as capital to establish and implement the offline business of your choice .
 
E

eldavis

Guest
If you want to start a business and you are broke, why not work under someone, they You can save up your pay from there. While working under someone, you would also gain experience from there as well. Instead of going for loans and other means of getting funds, this is one of the best way to go about it, though it might take time.
 

Abigael

Valued Contributor
Starting a business when you are broke is something that is so unfortunate. It affects so many people and this makes them almost loose hope in starting the business. My advice to them is that they should not give up, the sun will soon shine for them and they will have enough money to fund their good idea.

Bootstrapping is a very good method of finding a business. Naturally, people may have their own savings and income saved somewhere. You can start by using those to start the business. You may be starting with a little amount but putting in effort will eventually earn you a good amount and improve your business.

You can also try and get a job or a source of income so that you can save for the business. It is so fortunate that these days, you can work either online or offline. If offline jobs have become so hard to get, you can learn a skill and work online. You can even start saving the money you earn from posting in forums.

Borrowing from family and friends is also great. This is because they won't necessarily ask you to pay with a high interest rate like most loan lending companies do.
 

Yusra3

VIP Contributor
If you lack personal funds to start a business, explore options like small business loans from banks or alternative online lenders. Crowdfunding platforms allow raising money from backers in exchange for rewards or equity. Pitch to angel investors willing to provide seed capital for a stake. Alternatively, launch an extremely lean startup by bootstrapping through service-based offerings requiring little capital, reinvesting all profits into growth. Persistence and creativity compensate for empty pockets initially.
 
Top