There are plenty of books on how to finance a startup company. Sadly, many of them include suggestions and strategies that just arenít realistic enough to be effective. Meanwhile, back in the real world of entrepreneurship, plenty of owners get the job done every day, finding ways to pay for all the assorted expenses of opening the doors to a new enterprise.

How do they do it? It might be a shock to some, but most of the successful startups use old-fashioned techniques for raising money. Things like traditional bank loans, leveraging credit cards, chopping out a few monthly expenses, and tracking down angel investors are among the most common. However, strategies that include newer approaches like crowdfunding are also a big part of the quest for capital among modern day entrepreneurs. Here are some tried and true ways that new business owners raise money to get the ball rolling for their new entities.




Secure a Business Loan

Getting a bank loan is one of the most popular ways for new owners to acquire needed capital. If your credit scores are at least decent, you can usually get the cash you need at a fair interest rate from a lender you already know. However, it makes good sense to shop around for deals because your own bank might not offer the lowest interest rates or best terms in town.



Use Credit Cards

For many entrepreneurs, putting startup expenses on personal credit cards can seem like the option. In fact, you shouldnít opt for this tactic unless all the others have failed you. Credit card debt is expensive and adds up fast. Once youíre unable to pay the statement balance, the debt carried over each month will continue to build up costly interest. So, after youíve exhausted every other avenue of financing, yank out the plastic. But remember to pay off the debt as quickly as possible to avoid getting hit with interest charges.



Cut Monthly Personal Expenses

One of the smarter ways to free up money in your personal budget is to refinance student loans. Youíll save plenty with lower monthly payments but also get the benefit of a longer time to repay and lower interest rates on the refi agreement. When it comes to refinancing student debt, entrepreneurs canít do much better. Combined with other strategies for raising capital, a refi package is an effective technique.

Use Crowdfunding

Crowdfunding is a crap shoot in many ways, especially for new owners who are unfamiliar with the way the process works. Even so, plenty of new companies got their initial capital inflow from crowdfunding projects. If you plan to go this route, hire someone with experience to assist you.




Shop for Angel Investors

In addition to taking out personal loans, getting cash from angel investors is one of the most popular ways to finance a startup. There are agencies that specialize in helping you identify angel investors, but the process is slow and does cost money. Many entrepreneurs, especially those in no hurry to open their doors, spend several months searching for investors that fit your specific needs.



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