5 Popular Ways to Get Startup Funding in 2022 

 April 12, 2022

5 Popular Ways to Get Startup Funding in 2022

Many people often have great business ideas, but the major problem is funding. It doesn’t matter how big or feasible the business idea is, if you don’t have funds, that idea may never come to a realization. Although it may be difficult to get funds to implement your business idea, research and persistence can help you get the amount of money you want.

As the new year begins, it is not enough to have a business idea. You should explore different options to access the required funds for your business. Believe it or not, you can get free money to start a small business if you put in enough effort.

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Here are 5 popular ways to get startup funding in 2022:

1.  Friends and family

This is one of the best ways to get money to start a business. Although not every friend or family member can be relied upon, there are a few who are always willing to stand with you. This is different from convincing a bank or group of investors to finance your business idea.

The first thing is to decide if you want to borrow the money from family and friends or borrow from them. If you take a loan from them, it is advisable to seek legal advice and agree on the specified terms of the loan. You should also understand the risks of this kind of funding a startup.

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2.  Trade equity or services

Trading equity or services is another great way of funding a startup. Trading equity means that you agree to give the person funding your idea a certain percentage of the business in exchange for the funding. On the other hand, you can decide to offer your skills to an individual or company in exchange for money to fund your business idea.

3.  Small business loans

According to Lantern by SoFi, “There are small business loans for various types of businesses, whether you’ve been in business for six months or six years”. There are financial institutions or banks that provide loans specifically to small businesses. They will evaluate your business idea and ascertain its viability before issuing the loan. However, most banks do not give business loans to startups or struggling businesses. The main disadvantage of this type of funding is that some banks or financial institutions may take advantage and take over your business through exorbitant interest rates.

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4.  Bootstrapping

This is another common way of getting your business up and running. Bootstrapping simply means using your own money to kickstart a business. The money may come from low or no interest credit cards, personal savings, or lines of credit on your home. The good thing about this form of funding is that you won’t have to give out equity or pay higher interest rates on loans.

5.  Crowdfunding

If you have a really good business idea, crowdfunding can also be a great way to source funds. This is particularly if you have a strong social media presence. There are a number of crowdfunding platforms that support business sexy business ideas. You only have to convince the public of the viability of your idea.

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In a nutshell, having a business idea is one thing and accessing funds is another. You should explore the various options mentioned above to increase your chances of getting funds.

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