Premier Gazette recently revealed the different ways to fund a business in the article, “How Entrepreneurs Can Fund Their Business: Tips From Paul Saunders, Founder of James River Captial.” James River Captial was created in 1995 after Kevin Brandt and Paul Saunders created the investment firm. It focuses on providing global macroeconomic strategies, asset-backed securities, managed futures trading, fixed income arbitrage, corporate credit, and equity strategies. Paul Saunders revealed that creating a successful business is about creating rather than focusing on competition.
Saunders believes bootstrapping is one of the best ways for people to get their business started. It is when business owners use their personal savings, credit cards, and loans from friends and family. Many entrepreneurs use the bootstrapping technique to cover most of the startup costs. When entrepreneurs use their savings, other investors are more likely to take the business seriously. It also prevents people from giving up control of their business. The equity also remains with the entrepreneur instead of investors. Though some people may not be able to use the bootstrapping technique, there are many other options.
Crowdfunding is another option for people looking to fund their business idea. Crowdfunding use social media and other platforms to gain funding from a large group of people. The supporters pledge different amounts of money to help meet the goals or payment tiers set by the business owner. Marketing is an important part of crowdfunding. Social media can help build an audience and create a greater following for the business. Many businesses that have used crowdfunding to launch have become incredibly successful. For instance, Oculus Virtual Reality Headset was acquired by Facebook for 2 billion after raising $2.4 million from crowdfunding.
Business loans are another more formal kind of funding. Small Business Administration loans and bank loans are a great option for those who have high credit scores. SBA loans have higher interest rates, but they allow entrepreneurs get approved more quickly. Bank loans can take a long time to get approved, but they are generally cheaper. If a business owner has low credit, he or she can research equipment financing. The equipment becomes a collateral for the loan and there are fixed monthly payments.