5 Reasons to Get Startup Funding Now
- October 2, 2019
- 9 min read
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Unless you were born rich or have plenty of family cash to pour into a startup, you’ll probably need to seek outside funding to get it up and running.
Getting startup business funding is a necessary step for just about any business, but not always an easy one. Even if you believe in your product or service, you might be unsure that lenders and investors will feel the same way, plus taking on debt can be scary for new entrepreneurs.
It’s time to change that way of thinking. Committing to your startup means committing to the money that can make it a success.
5 Reasons to Get Startup Business Funding Now
If you’re on the fence, there might be some variables that will help you decide if now really is the right time to commit to funding. Here are five reasons to seek startup funding now:
1. Opportunity Is Banging on Your Door
We’ve all heard variations of the phrase, “Opportunity doesn’t knock twice.” It sounds like a cliché, but in business it’s true. You don’t want to delay getting funding when you see an opportunity that might not be there tomorrow.
Here are a few scenarios when a startup should grab the opportunity while it’s there and make an immediate commitment to funding:
- The perfect location for your business just became available and you need funding to buy or rent the building before someone else swoops in to grab it.
- You want to be first to market with an in-demand product or service and need financing to ensure your business is up and running before the rest of the competition.
- You’re close to landing a big contract with a new client and you need to purchase a piece of equipment to ensure you can handle the workload.
- A supplier in your industry is offering a huge discount on bulk inventory and you need financing to make the purchase.
- You have a chance to acquire a rival company or brand and need funding to make the deal happen.
In these types of cases and many others, getting funding immediately ensures you can take advantage of market opportunities that might never come again.
2. You Need to Expand — Quickly
Some startups are born from little more than an idea, a laptop, a phone and a few industry connections. They owners pitch a product or service around, land a few early clients and begin to build a customer base. Before long, they find themselves with more business than they can handle with their existing operations.
It’s a good problem to have — but one you’ll want to address as soon as possible to ensure you don’t have to turn customers away. This usually means seeking funding to pay for more staff, space, equipment and/or infrastructure to ensure your startup can meet rising demand.
The good news is, you shouldn’t have a hard time convincing lenders or investors to fund your startup — especially since you can show them that their money will be used to help a growing business grow even bigger.
3. You Need Cash Flow
On the other end of the spectrum is a startup with sufficient infrastructure and people in place but not enough business to cover all of its financial needs.
In this case, you need funding to keep the business operating at full throttle until it has enough cash flow to pay for itself. Again, committing to funding here means committing to the business itself.
Short-term loans are a good way to pay for operational costs that keep your startup heading in the right direction. With the right amount of funding in place you can focus on bringing in new customers and building your business.
4. The Timing Is Right for Your Business
If you’ve gotten to the stage where you need funding for your startup, chances are you’ve already done plenty of due diligence in terms of market research, financial projections and growth potential. Chances are you’ve also concluded that your product, service or idea fills an immediate market need and will turn a profit.
If you believe now’s the right time to launch your startup — and have the data to back it up — there’s no reason lenders or investors won’t believe it, too. Making the case in a compelling way means convincing the money people that their capital will be put to good use.
As long as you’ve run the numbers correctly, put together a comprehensive business plan and create a strong case arguing that your startup will be a success, there’s no reason not to take the next step by approaching others for funding.
5. There Have Never Been More Funding Options
If you’re looking for loans or investors to fund your startup, you’ve chosen a good time to do so. Startups today have access to millions of potential investors they never would have been able to reach as recently as 15 years ago.
Even if you can’t get funding from traditional sources such as banks, credit unions or the U.S. Small Business Administration, you can tap into numerous alternative sources that offer less stringent qualification requirements and more flexible terms. These include:
- Online banks
- Peer-to-peer (P2P) platforms
- Fintech companies
- Crowdfunding sites
- Alternative lenders
If you don’t go after that money now, it’s a sure bet somebody else will. And with interest rates changing, now might be a better time to secure funding than tomorrow.
The Bottom Line
You’ve no doubt heard the saying that “it takes money to make money.” Now’s as good a time as any to embrace it.
Without the right amount of capital in place, you’ll have a hard time running your startup, much less paying for marketing, inventory, equipment, staff, goodwill and all the other fees, licenses, taxes and operating costs necessary to stay in business.
If you’re on the fence about whether to get startup funding, remind yourself that it’s simply another step (and an essential one) on your way to running a successful (and profitable) business.
More From Seek
- 10 Incorporation Documents You Need to Create a Corporation or LLC
- 5 Steps to Take After You’ve Been Rejected for a Small Business Loan
- 5 Questions to Ask Yourself Before Starting a Business
- How Hard Is It to Get a Business Loan?
Photo credit: Flamingo Images/ Shutterstock.com
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