Connect with us

Blog

5 Ways To Raise Money For Your Business!

mm

Published

on

Business is not a cup of tea for everyone; it comes with many sacrifices and turns. Every entrepreneur or business founder feels like to raise funds for the business to leverage it. Raising money for the company is one of the difficulties every business person faces in their business life.

Because business needs cash flow, correctly managed liquidity when you are setting up something new. Later it might give you a lot back, but in the initial stages or mid-stages, it needs cash. From renting workspace, hiring staff, buying essentials everything needs to money, to shape your idea, to run your business.

Unless you have rich people backing your business or born with a silver spoon, then you need to think about raising funds for your business. But many people consider that there is the only way to get funds, lending from the bank. Well, that’s away, there are some other ways too. Let’s explore them.

Crowdfunding

What is crowdfunding? This question might be ticking in your mind. It’s a way to get funding from the mass of people or organizations such as food cart for sale and other stuff. There are some pretty powerful platforms for startup aspirants or entrepreneurs to raise funds. Platforms like Kickstarter, Indiegogo, and Fundable doing a great job in the crowdfunding section.

But every fundraising platform has its pros, and cons like Indiegogo began offering fundraising campaigns without end dates while an end date is essential for business owners. So it’s entirely based on the needs of the founder.

Angel Investors

Angel Investors are the most reliable way to raise funds for your next idea or business. This kind of investors are always looking for new ideas to invest funds. Angel Investors fund many tech giants in the world like Google, Yahoo, and some others in their early days. Angel Investors not only gives funds, but they also guide, provide resources, and many other facilities.

This type of investors shows interest in a business which has great potential but needs funds for rising. Taking money from angel investors requires to give some of your business share to the investor. And all the business transactions must be registered with the Securities and Exchange Commission.

Venture Capitalists

Venture Capitalist are very similar to Angel Investors. But they only invest money in the projects they find profitable for them. As like Angel investors, venture capitalists also look for the shares and business percentage in return for money, but also they want to handle the voice in the direction of the company.

VCs are maybe a single person or a group of investors, but the concept of every VC is the same. They feel growing a company in which they invested vast chunks of money needs to have some control over how the company gets managed.

Friends and Family Loans

This type of funds could be beneficial for your business. Someone from your friends or family, seeing your success or well-maintained business, they might show some interest to invest some money. In most cases, they don’t look for many stakes, or a considerable percentage of interest if they lend you.

But it’s completely advisable to look for all the pros & cons of this type of funds for your business.

Contests

It is another best way to raise some early investment. Many contests are organizing where you need to pitch your startup plan, business plan, and you will win some cash.

Conclusion

There are many other ways also available to raise the required funds for your business. But choose according to your needs and business size. Keep in mind that never compromise with your business plan ever for the sake of funding, if one rejects more five are here to listen to your project.

Michelle has been a part of the journey ever since Bigtime Daily started. As a strong learner and passionate writer, she contributes her editing skills for the news agency. She also jots down intellectual pieces from categories such as science and health.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Blog

How Conventional Scores Are Stopping Most Millennials From Accessing Credit and How One Company Is Changing That

mm

Published

on

Credit scores are a barrier to entry for just about everything for millennials. Trust Science® is taking new metrics into account to expand access to credit with Credit Bureau 2.0®

What’s Keeping Millennials From Accessing Credit?

The concept behind a credit score seems simple enough. It tracks your credit history to see if you’re someone that a bank or lender can trust to pay back a loan. However, conventional credit scores just don’t account for the way that millennials and Gen Z handle their finances.

Even where a person would be fully capable and reliable in paying back a loan, the lack of an established credit score can prevent them from accessing credit, or at least from getting as much as they should be able to. That leaves millennials without an on-ramp into the modern economy and it can also jeopardize access to other “credit gated” necessities like housing.

The way that conventional credit scores are calculated is complex but boils down to 5 essential metrics:

  1. Payment history
  2. Amount owed
  3. Length of credit history
  4. Credit mix
  5. Hard credit inquiries

You can start to see the issue for millennials when you look at what data goes into their credit scores. For one thing, younger people don’t have a long credit history. Even without other factors, simply being young and only having had so much time to build credit puts them at a disadvantage. However, millennials have also been tending to establish credit later in life compared with previous generations, putting them at a further disadvantage.

The most significant issue here is the credit mix. Different types of credit affect credit scores differently, and millennials generally don’t have a favorable mix. While they might have a credit card or two, they generally don’t have mortgages. These are the most beneficial type of credit to have on your credit report, and millennials really have that going against them.

The student loan crisis also plays a big role. Young people today have much higher student loan debts than previous generations, meaning they have a great amount of credit owed. Not only that, but many can begin to fall behind on payments and see that amount grow. This can quickly send a credit score spiraling out of control.

Student loans aren’t the only threat. When young, some people make poor decisions. They could find themselves making credit mistakes very early on and suffering the fact that those mistakes can haunt their score for seven years in general. That means someone at 25 is still paying for a mistake made at the age of 18, even if they’ve been on the up and up ever since.

It’s clear that conventional credit scores weren’t designed with the current landscape in mind and that young people are being negatively affected. But what exactly can be done about this? One company is changing the way that lenders look at creditworthiness to make it possible for millennials to mitigate these issues.

How Credit Bureau 2.0 Fixes Those Problems

Trust Science is an innovative fintech company that has developed Credit Bureau 2.0, a scoring service that acts as an antidote for lenders, offsetting the problems posed by conventional credit scores. Instead of seeing a lack of credit history, a few negative issues from years ago, or a poor credit mix and ending any credit application, Credit Bureau 2.0 considers a wealth of additional data to generate a more accurate credit score.

Credit Bureau 2.0 expands the data used to calculate credit scores, getting the borrower’s consented, permissioned data and/or acquiring Alternative Data in order to reach a more accurate credit score. For example, those applying for credit can use Trust Science’s Smart Consent™ app to divulge their information safely and confidently to Trust Science, which is working on behalf of the lender that is trying to reach a decision about the borrower. By doing so, young people or other people without a credit history in-country can let prudent financial decisions in other areas of their lives demonstrate that they’re trustworthy for greater credit.

The service is available to a wide variety of lenders, including auto lenders, installment lenders, and single-repayment lenders. It’s in their best interest to find more reliable, deserving borrowers to give loans to, so Credit Bureau 2.0 benefits both sides of the transaction.

Trust Science CEO Evan Chrapko says that “Credit Bureau 2.0 isn’t just about giving borrowers access to more credit than they would have had otherwise. It’s about recontextualizing financial data to give both sides–lenders and borrowers–a more accurate and reliable way to enter into loans in the modern economy.”

Continue Reading

Trending