What's up YouTube? MPS here from Wix Training Academy and today I'm going to explain how to obtain funding for your small business or startup idea.
Listen, I am a college entrepreneur, a dorm room entrepreneur, if you will. And I understand the frustration you can have if you've got the next great idea or a solid business plan, but you just don't have the funding to execute it. I understand that.
But before we dive into these five awesome ways to get your business funded, let me first say congratulations. If you're brand new here, and if you'd like to join a community of 29,000 plus other like-minded entrepreneurs, just click that subscribe button in the bottom right of this video and you'll be instantly notified every single time we get a new video released. And hey, if you've been here for a bit and you still haven't subscribed, no hard feelings. All you gotta do is click that button right down in the bottom right. But let's talk about how you can paint some cash to get your business going.
So the first method I'd like to share is a new nifty service that actually just recently came out. It's called Kabbage and Kabbage is a pretty cool platform. You can go on there. There's a link in the description below, and I'll throw all of these methods in the description below. And what you can do is you can instantly apply to get a line of credit.
So Kabbage offers a line of credit up to $250,000, and you'll be notified pretty instantly whether you've been accepted or not accepted to obtain that line of credit, they do this over a certain month term. So it would be either a six month, nine month or 12 month term. And this is especially great f you need working capital to get your business, either growing, maybe you just got a new, huge purchase order and you need to fulfill it. This is excellent for that. It could be used for startup purposes as well, but that's what I would use Kabbage for. Excellent new tool.
Secondly, hey guys, listen, family and friends. I know sometimes it can be difficult going up to your Family and Friends and saying, "Hey, I've got this awesome business idea. Do you mind giving me some money?" I know that can be difficult, but it doesn't have to be presented in that way. It can be a very honest conversation with a select group of your family and friends that you believe would be interested in contributing to your business. Because at the end of the day, guys, if you've got an awesome business idea and you are the person to go out there and execute it and you know, you can get it done, it doesn't hurt to ask. The answer will always be no, unless you ask, because you'll never know if you never asked someone what day might've said, you never know. They could have said, "Yeah, sure. I'll give you 25 grand to go play with right now. "
Now how you work out those terms. If you'll pay your family and friends back, if you offer them equity in your company, you'll have to determine how that will be. Or if you're just saying, Hey you know, this is just a good deed, likely chances are people won't just do it out of the goodness of their hearts. Unless you're asking for something and nothing too extreme. So that's another method.
Third method here. This is often overlooked for some reason, it's reinvest the profit or the know the, excuse me, the profit that you generate in your business existing back in. So some of you, if you're watching this may have a startup and you may not have profit yet to actually reinvest into your business. But if you've got an existing business, that's generating some revenue and thus generating you some profit, hopefully if you're not operating at a loss or breakeven then you can go ahead and take that profit and reinvest it into continuing to grow the business and starting from a however level of funding, rather than trying to operate at as low cost as possible forever. You want to be able to reinvest that profit to continue to grow. And that's more of a growth stage than a startup phase.
Fourth way to go about is obtain a bank loan. This obviously isn't my personal favorite because obviously you'll carry debt. You would carry debt with Kabbage and stuff like that too, but you can go down to your local bank and apply for a loan. Now they will do a credit check. So you are going to need to have good credit in order to obtain a loan and you'll likely have to put up collateral. And what I mean by collateral is a car, a house there's going to have to be collateral.
The bank sees as valuable in order to actually obtain a loan, especially depending on the size of the loan you're looking for. You know, it's a lot different if you're going into a bank looking for a $10,000 loan, and if you're going into a banking looking for a $250,000 loan, there's a big difference there. And so obviously that will be reflected in what the bank requires it in order to obtain it. But at the end of the day, it does come down to your credit history. If you have poor credit history, the chances of painting alone are probably pretty slim.
Last but not least number five is crowdfunding. If you haven't thought of this as a method, I recommend you do show. If you've got a cool idea that you believe a lot of people can get behind, then crowd funding may be a good source for you. Places like Kickstarter or Indiegogo. These are excellent sources of crowdfunding. This especially works well if you've got kind of like a viral product or service, it's not required to be, but it does work better if you've got like a viral product or service. You'll notice on Kickstarter you're has to be met as far as the funding goes otherwise you'll never see the money. Indiegogo is a little different. I believe you have a goal set and then you get whatever money you raised for that particular goal. Even if it doesn't get it. But remember guys, you do have other people's money on the line here.
So if you're going into a crowd funding idea, you want to be very positive that you'll be able to want accurately predict the numbers that you're saying show you don't want to low ball your funding needs. And then ended up getting the funding goal and realizing, "Well, sh*t, I needed a lot more money to make this happen". And now you've got everybody's money here and you can't make it happen, right? You want to be very careful of that. And you want to go in with very accurate projections based on your funding needs. And if you can accomplish that, then you will be in good hands in the crowdfunding arena. And it can be a very good experience, especially if people really like the product or service idea that you have can even go viral and you can hit some pretty significant goals if done correctly. And there's a lot of science behind the whole crowdfunding arena, but that is the fifth and final method.
So if this video helped you out, I run a web development business and all the time we come across people that come in looking to build an awesome platform for starting something new for their business. And they just simply don't have the funding in place. I always sit there and I'm like, "How can I help these people out to determine some excellent sources to go to for funding? " So I decided I would create a video.
If this video did help you out drop a like down below. Comment if you've got any questions at all, I'm here to help. I'd love to direct you in the right way. And lastly, I'd love for you to be a part of this community. We actually have a goal here to hit 50,000 new members subscribers in our community by March end of February. So if you feel like you can help us make that happen, it starts by clicking that subscribe button and sharing this content with other like-minded entrepreneurs that may need this video to figure out where they should go next. As far as funding for their small business or startup.
Like I said, I'm a college entrepreneur. I completely understand how funding is tough to combine. I'm here to hopefully tackle that problem for you and help you in the right direction. Thank you guys so much for watching. I'll catch you on the next one.