There are many factors to consider when starting a business. What product/service to offer? Will you host the business online or open a traditional brick-and-mortar establishment? And so on and so forth. But before you settle on any of these, you need capital, yes, hard currency. In this episode of Your Business Matters, Tom Ryan, co-founder of Supportedly and founder of Start 100, tackles the issue of startup funding. Is it wise to borrow from a bank to start my business or can you afford to shoulder these expenses out of pocket? Or is it better to explore non-traditional ways of sourcing funding? Perhaps you’ve heard of the term “good” debt — low-interest debt that over time helps to increase your income. However, the risk-averse may argue that making use of a loan when the return on investments is uncertain is too much of a risk to take.
While it can be argued that the use of personal savings would be easier, the option is not feasible for many entrepreneurs, and attracting investors for startup companies is a task and a half. So what’s the verdict? Do you fund your business out of pocket, from other non-traditional ways, or should you seek funding from a bank?
Key points discussed include:
- From where you sit, what has been your experience with entrepreneurs who have had startups but were not able to garner the funding they desired?
- Other than interest, what benefits do banks derive from issuing small business loans?
- Why should startups look into non-traditional ways as opposed to accessing a loan from a bank?
- Why should entrepreneurs seek startup loans from the bank?
- Is the difficulty in accessing a business loan tied to the fact that 80% of startups fail?
- What are the requirements for a small business owner to get a loan?
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I utilize my background and expertise in project leadership to find creative operational solutions every day. I’m passionate about great ideas and inspired by the entrepreneurs who bring them to life (ever seen someone cry happy tears over your prototype?). I'm fortunate to work with people who share my passions and inspire me every day. Together, we're working non-stop to create cool things that empower entrepreneurs and business owners, like Supportedly.com, the place to find entrepreneurial support programs, events, and actionable content like The Supportedly Podcast. To all the providers and entrepreneurs they support, thanks for letting me tell your stories, and if you’re reading this, I hope we’ve helped make your entrepreneurial journey just a little be easier and maybe even more exciting!