Bootstrap financing is a common funding option for business ventures because it requires no external financing and allows companies to grow organically without taking on additional debt or diluting equity. Many sources can help bootstrap entrepreneurs with funding for their new businesses. This blog provides some ideas of where to find these resources.
What is Bootstrap Financing?
Bootstrap financing is a business term that refers to the practice of using your own resources and credit to finance a startup company. Bootstrapping provides an entrepreneur with an opportunity to maintain control over their vision for the business while also building it from scratch without taking on outside investors or loans.
Sources of Bootstrap Financing
Savings and Personal Investment
Bootstrapping a business is an independent and financially savvy way to start your own business. There are many different ways you can bootstrap, but one of the most common sources of financing is personal savings.
These available funds will allow you to finance your startup costs without borrowing money or using any loans. Having excess cash on hand at all times is essential for this strategy so that when opportunities arise, you can take advantage of them immediately instead of waiting until the next day or week when it may be too late.
Small Business Grants
Small business grants can be an excellent resource for entrepreneurs who have a great idea but lack the initial cash needed to get started. They are given out by many organizations, including government agencies, banks, and private foundations which are looking into investing in new ideas or expanding their current portfolio. The application process is typically competitive, so it’s important to start researching when applications open up if this type of funding would work for you.
Family and Friends
Many entrepreneurs and small business owners turn to their families and friends for financial help. They borrow money from them, sell products to them at a discount, or offer services in exchange for cash flow assistance. There are many ways to secure financing from your circle of influence, but there are also risks associated with this type of funding.
Final Word
The list of potential sources for funding is growing every day. If you find yourself in need of money to start your new business, keep this blog handy so that you can see where the best places are to get the funds necessary to make it happen.
