5 Ways Mompreneurs Can Finance Their Businesses

5 Ways Mompreneurs Can Finance Their Businesses from North Carolina Lifestyle Blogger Adventures of Frugal Mom

Running a successful business requires hard work, dedication and – in most cases – money. 

As a mompreneur, you’ve proven that you’re dedicated and hard-working. But getting the funds you need to expand your business or get it off the ground may be a challenge you’ve yet to overcome. Consider exploring options like a Personal Loan Woodlands to support your entrepreneurial endeavors.

Here are five ways mompreneurs can finance their businesses.

1. Crowdfunding

If you have a unique product that you want to launch, crowdfunding may be your best bet. The concept of crowdfunding is simple:

  • You share your idea (i.e. your product) with the world
  • Set financial goals and a timeline
  • The general public pledges money to help you reach those goals

Most entrepreneurs offer an incentive for pledging cash, including free products and other perks.

Some of the most popular crowdfunding sites include:

Each site will have its own requirements regarding funding and business type.

2. Personal Loan

One of the simplest ways to get the financing you need is through a personal loan. 

Traditional bank loans generally offer lower rates than other forms of lending, but they can be hard to obtain because lending standards are strict.

You’ll need a good credit score (700 or higher, ideally) to get approved and secure a good rate. You may also need collateral. But most importantly, you’ll need patience. 

Depending on the lender, it can take up to six months to secure a loan so it’s worth your time to plan ahead.

3. Mezzanine Financing

Mezzanine financing offers quick approval and flexibility, and it doesn’t require collateral. 

This type of financing is a popular choice for small-scale business operations, which is what many mompreneurs run. According to the mezzanine financing experts at Maxiron Capital this form of acquiring capital is ideal for startups, noting “as a hybrid of debt and equity financing, mezzanine funding is perfect for mumpreneurs who have moved beyond the startup phase but don’t have the capital to upscale yet. As a lower cost alternative to raising equity, this means less risk and more control.”

One of the main benefits of mezzanine financing is that it doesn’t require strict legal documentation, and capital can be accessed much earlier than with a personal loan. Plus, loans can be short or long-term, depending on your needs.

4. Family and Friends

The people who care about you most – your family and friends – are the ones who want to see you succeed. You may be surprised by how many would be willing to help you make your dream a reality.

Try pitching your idea to your loved ones, but come armed with answers. You should be able to explain how much you’ll need, and where and how you’ll spend the money.

5. Invoice Factoring

If your business requires you to send invoices to clients or customers, invoice factoring may be another way to get the financing you need.

It’s an expensive way to get capital, but it may be a practical option if you have poor credit.

Essentially, you’ll be selling your open invoices at a discount in exchange for up-front cash. It works similarly to cash advances. You’ll pay a fee or a percentage of the total amount due on the invoice.

Keep in mind that you’ll be giving up some of the money that’s owed to you. But if you’re hard-pressed for cash and need funds to stay afloat for the month, invoice factoring may be an option for you.

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