Small businesses are the biggest drivers of the global economy, but they still face significant challenges when it comes to raising capital. In the current economic landscape, entrepreneurs have to come up with creative and out of the box financing options for their new businesses.

In most cases, the amount of funding your small business attracts primarily depends on its projections, model, and marketing strategies. However, for a small business, be wary of financiers that seek unreasonable control of your business or others that drag you down the path of unrealistic debts.

Here are seven realistic ways you can always rely on in financing your start up or small business working capital.

1. Crowdfunding 

Over the last two decades, several crowdfunding sites that allow entrepreneurs opportunity to seek funding for their ideas have sprouted over the internet. In most cases, you only need to create a funding campaign that you can them pitch to family and friends through social media. In most cases, compelling pitches go viral fast thus attracting enormous contributions from individuals across the globe. Note that if you are to make a kill with your funding campaign, make it clear to the contributors how your idea will support the community as an asset.

2. Angel investors 

Angel investment remains one the most realistic and feasible for entrepreneurs that don’t need long term business partners. Family and friends come in handy in identifying a trustworthy angel investor, pump in capital into your small business with the promise of payback of their investment plus interest. However, if your angel investing pitch is to fruition, you need to master your business plan and back your valuations with real projections. Additionally, note that such transparent relationships must be based on trust.

3. Governmental grants and loans

Most governments of the world understand the role small businesses play in their economy. These governments thus set up elaborate financing schemes aimed at funding these small outfits. However, only a handful of individuals end up benefiting with such loans and grants either due to ignorance or the bureaucracy in accessing them.

Therefore, as an entrepreneur, you need to spend more time learning of these government loans and grants from your local banks as well as the internet. Note that to beat the lengthy, and often frustrating, process of accessing these funds it is advisable that you work with loans and grants specialists.

4. Savings

This remains one of the most popular methods of financing small businesses and start-ups globally. It can also be categorized among the less risky investment options as you only stand to lose your savings should the business fail to hit its projections. In most cases, entrepreneurs often use the cash saved in financial institutions while others resort to selling personal property with an understanding that property will always be there and can be reacquired once the business breaks even.

5. Family and friends

Unlike banks and investors, family and close friends understand and believe in your visions. They are, therefore, easier to convince about your business projections and to invest in your dream. However, ensure they understand the risks involved and remember to loop them in every major decision you make about the business to avoid straining your relationships. Additionally, never take advantage of their generosity by over borrowing.

6. Equity bootstrapping

If you don’t need to tie your businesses up to loans from friends or hand over control to investors, you can always result to funding your business through plowing back business profits. However, this only works for established small businesses that are already making profits.

7. Partnerships

Sometimes, when you have a solid business plan, it makes more sense to partner up with your financier. However, look beyond the current financing problem and find a partner that adds expertise to your business and its operations. What happens when the startup eventually breaks even expands its market foot hold and managerial departments? At such a point you will need a partner that you can rely on to efficiently head some of its operations.

Bottom line

There is a need for every small business owner to get creative when looking for funds. Consider networking with other small business owners as well as getting media and internet exposure. From such exposure, you learn the benefits and shortcomings of the different financing options such as partnerships, angel investments, and involvement of family and friends in your business. Most importantly, learn that cash should not stop you from achieving your entrepreneurial dreams.