Forum Discussion

BestChoiceBaths's avatar
BestChoiceBaths
Contributor 2
31 days ago

Who has some insight on how a new business can get funded?

How can a startup secure working capital, business loans, or business credit when the owner’s personal credit is insufficient to support the business?

 

I recently launched a business two months ago and immediately hit the ground running with immense enthusiasm and confidence in its potential. Within this short timeframe, I’ve managed to generate significant interest from several large companies, including one with over 300 locations, all eager to sign contracts with me to advertise and sell my product. I firmly believe this business has the potential to grow into a billion-dollar company within the next decade.

 

However, I’ve encountered a substantial challenge: securing the necessary working capital to fulfill my initial orders and deliver products to these companies. My personal credit is a barrier—primarily due to a lack of history and past financial missteps, such as multiple hard inquiries when attempting to finance a car two years ago. These factors have made it nearly impossible to obtain funding for my business, creating a bottleneck in my ability to execute and meet the demand from prospective clients.

 

I am seeking advice on alternative funding solutions, such as options for startups to establish credit independent of personal credit, strategies for securing business loans without strong personal credit, or other methods to raise working capital quickly. I am eager to learn and take actionable steps to overcome this obstacle, as I want to ensure the excitement and interest from these potential partners remain strong. Any insights or recommendations would be greatly appreciated.

business advice
  • FredHodgeJr's avatar
    FredHodgeJr
    Contributor 4
    11 days ago

    Leverage Purchase Orders or Contracts. Companies like BlueVine or Fundbox specialize in invoice factoring for startups.

    Look for secured credit options from providers like Brex or Ramp, which are designed for startups and may not require a personal guarantee.

    Organizations like Kiva or Accion Opportunity Fund provide microloans to startups and businesses that might not qualify for traditional loans.

    Use platforms like Kickstarter to raise funds directly from your target audience.

    Research small business grants in your industry. Many local, state, and federal programs exist to support startups.

    Consider bringing on a business partner with strong credit or financial resources.

    Improve Personal Credit (Simultaneously) While exploring these options, work to repair and build your personal credit. Dispute any incorrect entries, pay down outstanding debts, and avoid additional hard inquiries.

    Check with your local Small Business Development Center (SBDC) or Chamber of Commerce for free consulting and introductions to funding options tailored for startups.

    Bootstrap Strategically, If all else fails, you can scale back your operations to focus on smaller, manageable orders until you build enough revenue to reinvest in growth. This ensures you avoid overextending and can stay afloat while proving your business model.

  • ryaantuttle's avatar
    ryaantuttle
    Jobber Ambassador
    31 days ago

    Great question!

    Two options would be a hard-money lender and/or bringing in a business partner that can help fund the business. However, without a good credit history it will be a serious challenge to accomplish that. 

    I suggest stepping back a bit and taking on smaller jobs until you can bootstrap your business.