The following is a general list of sources of funding.

Funding in this case is defined as increased cash (the working capital) in your company.

The list follows the following three groups: sell more product, borrow money, or sell pieces of itself. That list is too vague, so in the effort of making a it bit more real, I constructed the below.

1. Yourself – put your own money in.

2. Personal credit cards – very high rate of interest, but easy to get cash.

3. Loan on personal collateral item – second mortgage, pawn a car/boat/jewelry. Very risky and you could lose your goods.

4. Line of credit from bank – typically has fees whether it is used or not, reduced if you carry a large balance and have a good relationship with them.

5. Sell products – (increase cash flow) you sell products and reinvest the profit back into your own company.

6. Sell off business – sell part of your business or the contracts

7. Factoring – advance against receivables

8. Advance Against Royalties/Against Contracts

9. Accept Credit Cards – accepting credit cards on average increases a business by 35%!

10. Merchant Cash Advance – a loan against future income not realized by a contract

11. Friends and Family – get them to put their own money in. It can be a gift, loan, or stock purchase.

12. Loan from bank – includes collateral loans, SBA-backed loans.

13. Grant – government or private sponsor to either do research, or provide funds to a need category

14. Private Placement Memorandum using a reg d wholesaler – selling securities in your company via a person who represents your company to financial advisers (they sell the securities) who in turn find investors

15. Angel investor – private investor who uses their own money

16. venture capital investor – private/public investor who uses third party money

Items 1 to 3 do not require you do convince anyone of the viability of your company or products. You only have to spend your own money, or have a valuable item you are willing to collateralize.

Item 4 is typically not a problem if you have decent financials. It becomes more of a problem if you want to negotiate out of your fees or lower your interest rate, but you do not have to convince someone that hard about

Item 5 now gets into the area of convincing others to buy your product. This is the most basic but does involve improving your budget management and taking less money for personal gain.

Item 6 is actually a lot more common in certain industries. You have steady customers in one arena, but while steady they probably will not grow. Why not sell off the future business and get that cash up front? This can be easy or difficult depending on the industry and mix of customers.

Items 7,8 and 10 typically are only used when the business is doing well and needs to increase their working capital. You do not have to work that hard to convince someone to do this but just have the right type of business and financials. Item 10 sometimes requires to you to already accept credit cards but in other cases you may be able to get cash against contracts.

Item 9 sounds simple but its hard for a new business to get credit cards. If they do then it will be more costly, and most likely require a personal guarantee.

Item 11 now gets into the realm of convincing others to bet on the future with you, without collateral. This is the focus of this blog. The first step is get friends and family who already know you and ideally, believe in you.

Item 12 is difficult. Banks will not loan to start-ups but they will loan against someones financials (because they personally guarantee the loan).

Item 13 is getting a grant from the government or some private entity. Takes time, money, and the ability to know the right people. This actually may take longer than any other category.

Item 14, 15, and 16 now getting into the realm of selling securities in your company to strangers. While Item 11 was selling a security (maybe) it was to someone that knows you. Each of these requires work.

Items 12-16 definitely require a business plan.

As you can see, there are at least 16 different ways you can raise money for your business to expand. I tried to put it in the rank of easiest to hardest, but there would be a lot of argument on that.