Money for Startups
Startups are notoriously hard to capitalize because of one flaw: they have no proven track record to show investors (banks) the ability to payback a loan. In this example we are talking about a debt capital raise, not capital for an equity split.
Here are 3 Popular Capitalization Options for a Startup, with a 4th Option where Cast Capital can help.
Resources ordered from Least Probable to Highest Probable.
- Angel Investment Being the least likely option, finding a private funder that is interested in funding your business is easier said than done. This capitalization is usually for equity or hybrid equity/debt.
- Small Business Loan A startup faces an uphill battle when applying for a loan with no track record of making money. A lender will need to see some type of evidence that the business will actually be profitable and a track record needs to be established.
- Crowd Funding/Seed Money Getting your concept off the ground is most likely to be capitalized by crowd-funding, from an online community or by pooling donations together from friends/family for seed capital.
How Cast Capital can help:
We lend money to small businesses by establishing unsecured lines of credit to business owners. They can tap into this credit line to help fund their startup business. The line of credit is based on the credit worthiness of the new business owner, as the loan can’t be secured with any real cash flow from the new business. The line of credit can then be refinanced into a business loan once the business has a proven record of sales and cash flow.