If you know you’re ready to start your business the next step, and arguably one of the most important steps, is securing financing. However, it can be one of the most difficult. Don’t worry; plenty of successful entrepreneurs have been there. If you're looking for how to procure financing for your startup business, then you’re in the right place.
Every business is different but remember that solutions like small business equipment leasing can help cut initial costs and help you run your business.
We’ve compiled some of the typical avenues, but we also have suggestions that may surprise you so make sure you read to the end.
8 startup financing options for equipment procurement
There are various ways to finance or lease your business equipment. If you’re researching how to finance buying a business or a startup, a few of these options can also be helpful.
1. Equipment leasing
You might be trying to determine how to finance a business purchase or a new startup that seems out of reach. If so, you should look into leasing instead of buying, especially when it comes to equipment leasing.
Leasing allows you access to quality equipment without upfront costs. The best part about leasing your equipment is that as your business becomes more successful, you’ll have paid enough money to give yourself a purchase option - allowing you to own the equipment you’ve been using outright.
At Clicklease, we help entrepreneurs like you lease your industry equipment, so check out all of your options on your journey to financing your startup business!
2. Loans
One of the most common ways to finance a startup business is to take out a loan. Choices include personal, business, or equity loans. Just remember that the higher the loan amount, the more challenging it will be to pay off, with more significant consequences if you can’t pay.
3. Business credit card
Like personal credit cards, a company can get a business credit card. Funds availability will depend on your financial history and that of the company—if there is any business credit history. These can come with interest payments and other nuances you should consider. If you get too in-debt, you may find yourself paying interest fees in perpetuity as you try to pay off the card.
4. Self-funding (a debt-free option)
Some people may be in the rare position of funding their business independently. There are a few ways you can go about this:
- Use personal savings
- Work a day job
- Use retirement savings
- Use pension funds
It’s essential to note that you’ll be stuck with the bills if things go wrong.
5. Crowdfunding
This type of financing is becoming more common due to the popularity of sites like Kickstarter. The only problem is that if people don’t like your idea, they won’t give you money. That’s why not all crowdfunding campaigns are successful. Be aware that most crowdfunding sites take a percentage of your funding.
6. Grants
Business grants give you access to funds without worrying about interest rates or repaying the money. The catch is that there’s much competition, so you must stand out from the crowd to win the grant. You may also be required to put personal property down as collateral.
7. Lease a working space
If you’d prefer not to work from home but don’t have the budget for an office, you can always lease one. Whether you lease a single office room or a coworking space, you can still have a professional space without owning an office.
8. Barter goods and services with other entrepreneurs
What if you could access specific skills or tools without financing them? Enter a community of other entrepreneurs and see if you can trade with them. You may have the skills they need, like marketing or accounting, and they might have the equipment you require to make your product.
Steps for financing your startup
Here are the necessary steps for financing your startup:
- Decide how much money you need and where you plan to spend it.
- Pick the appropriate financing method(s) for your business.
- Follow the application instructions for each financing method.
- Gather and organize all essential paperwork.
- Use the money wisely and only on the business.
- Create a rough draft repayment schedule.
You could skip all that with Clicklease’s easy, 8-question application process. We offer equipment leasing for funding between $500 and $25,000. Once you submit your application, you’ll get an instant decision, even if you have bad credit or no credit. With Clicklease, your credit is only one of many factors we consider for financing.
Startup financing FAQs
If you haven’t found the answers you were seeking while researching how to finance a startup business, keep reading to see common financing questions.
What counts as a startup business?
The most significant difference between a startup and a small business is that a startup is still in the first phase of operations and constantly evolving. Startups tend to experience an extended period without making profits because of this.
On the other hand, a small business attempts to establish itself following already successful business models. Their goal is to generate income immediately.
What Is the best financing option for a startup?
All the alternatives listed above are startup financing options. Depending on the type of business you’re starting and its needs, some options will work better than others. You may need to consider several financing options to get your business up and running.
There is no “best” startup financing option. Your choice depends on what kind of business you want to start, your available resources, and how much work you’ll invest into getting other resources.
If you have more questions about financing, look to our “Myths about financing” article.
Leasing business equipment with Clicklease is a great way to access the equipment you need to help you finance your startup business immediately without having the funds to buy a massive amount of equipment outright.
Why Is leasing equipment better than renting equipment?
Yes, there are lots of benefits of leasing. With leasing, you often have the option to exercise your purchase option at the end of the lease term. If you choose to exercise that option, you will then own your equipment outright, with all the payments you made leading up to that purchase option having gone toward the cost of the equipment. With renting, you are just paying the owner for the right to use the equipment, with no option to purchase. When you lease, you can use the equipment immediately to generate income, and eventually own it, if you choose, as your business grows.
How can you fund a startup with no money?
Even without money, you still have plenty of options. As mentioned before, you can immediately take advantage of leasing options providing equipment or working space.
Alternatively, a satisfactory credit history will allow you to use a business credit card (but be wary of its pitfalls). Or, you can trade goods and services with other entrepreneurs.
Can you get a small business loan for a startup?
Yes, you can get a small business loan for startups if you qualify. Each lender has different requirements, so read their rules carefully.
Just remember, it can be hard. Most lender institutions require a positive financial and credit history. While you may technically be able to get a business loan with no money down, most of the time you’ll need to offer collateral like your home or car or deal with higher interest rates.
Where can I find startup business grants?
There are many places to find business grants. First, check out the U.S. Chamber of Commerce and U.S. Small Business Administration websites.
Get your business started with Clicklease
You can skip the annoying business paperwork and get your company up and running with Clicklease. Our customers love that they can access up to $25,000 worth of business equipment in just a few minutes. If you have bad credit, limited financial history, or no established business plan, Clicklease can help you. Apply in less than five minutes today!
