Small Business Finance

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When you’re thinking about how to raise money, one of the first things you should consider is bootstrap financing–using your own money to get your business off the ground. This is one of the most popular forms of internal funding because it relies on your ability to utilize all your company’s resources to free additional capital to launch a venture, meet operational needs or expand your business.

Bootstrap financing is probably one of the best and most inexpensive routes an entrepreneur can explore when raising capital. It utilizes unused opportunities that can be found within your own company by simply managing your finances better. Bootstrap financing is a way to pull yourself up without the help of others. You are the one financing your growth by your current earnings and assets.

There are a number of advantages to using the various methods of bootstrap financing:

  • Your business will be worth more because less money has been borrowed, and therefore, no equity positions had to be relinquished.
  • You won’t have to pay the high interest on borrowed money.
  • Coming from a stronger position (with less debt on hand), you look more desirable to external lenders and investors when the time does come to raise money through these routes.
  • You can be creative in finding ways to raise profits, without having to look to external sources. It will give you the added confidence of business savvy.

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