Sources of Capital for Entrepreneurs

Many people have amazing ideas to start their own business. But they get stuck at the initial phases: forming a business plan, finding a location, developing their product, or finding the necessary capital to pay for all the start-up costs associated with running a business, such as paying employees, paying to develop a prototype for a new product, or even paying the electric bill. This is where The International Association Of Credit Engineers can help. We have access to thousands of dollars of credit capital just waiting for the right entrepreneurs to take advantage of. Through our credit capital and credit consulting services, you can have thousands of dollars in monthly cash flow at your fingertips to fuel your ongoing research or the initial lump sum needed to get your business off the ground. Have capital sources available for your business is indispensable for business beginnings and growth. Below, we offer other sources of capital for entrepreneurs.


  • Personal funds. Also known as bootstrapping, personal funds are the most readily available capital as well as the capital with the least amount of strings attached. Furthermore, if you don’t invest in your own business, you’re sending a bad message to others who are looking to finance your venture. If you’re not personally committed, how can you expect others to commit to your business?
  • Love money. Also known as patient money, love money is usually capital given to a business venture with no repayment terms spelled out. The term comes from the fact that this is capital often raised from family or friends. Other common features of love money is this debt can eventually be forgiven, stock is not promised or exchanged, and no collateral is promised either. Caveats to accepting this money include caution when bringing your family and friends on board, and they may want equity in the company. However, having the support of your friends and family can be crucial when the going gets tough as well as a great show for when you do need more capital.
  • Venture capital. Venture capital is not for everyone. Venture capital is capital obtained by venture capital companies or institutional investors rather than individuals. Venture capital is sought by companies who anticipate high growth and who need a significant amount of start up capital. These typically include technology-driven businesses, information technology, communications, and biotechnology. Venture capitalists have high expectations and expect a relatively quick turn-around on their investment since most of these companies do this for a living. Venture capitalists usually ask for an equity position in the company (stock or equity) as a reward for a usually higher risk investment. For you (the business owner), this means giving up some ownership in your company. Venture capitalists often expect the company to take their company public, yielding even more return on their investment. Those businesses seeking venture capital often cannot qualify for the debt financing that they need for their business. The advantages to venture capitalists are that they are often connected and can get you even more capital for your business. However, they usually want an active role in the management of your company and can demand their initial investment at any time.
  • Angel investors. This is where the rich uncle of your best friend comes in. Angels are usually wealthy individuals or retired company executives who invest directly in small businesses. Angel investors usually have a wealth of business knowledge and connections, which is useful for a startup company. They also have years of management experience under their belt. Angel investors are usually the first ones to invest in a startup with funds up to about $100,000. Angel investors fill in the gap between friends and family and more formal venture capital funds. Angel investors usually expect some stake in the company in return for their funds, and most take an active role in the management of the company, such as a seat on the board of directors. Angel investors can be some of the best investors because often they are looking to pass on the blessings they have received in their business life to others and are more likely to support a small start up with a great idea but with no experience or expertise. Angel investors like to keep a low profile, so finding an angel investor is more based on who you know than anything else, although there are groups who will introduce you to angel investors as well.
  • Family offices. Think angel investors but tenfold, as family offices are families that are high net-worth, looking to invest in others. This source is often overlooked as, until recently, they were considered out of reach for many. However, family offices have a large amount of money to be invested. They make decisions quickly and move fast — great for start ups anywhere.
  • Business incubators. Business incubators are organizations whose goal is to speed up the growth and success of startup and early stage companies. Business incubators tend to focus on the high-tech sector; however, there are also local economic development incubators, which are more concerned about job creation and revitalization than making a profit with your company. Another service business incubators are known for is sharing their space and expertise with start ups. For example, if you’re working on something that requires a laboratory, a business incubator may allow you to use theirs, or if you need a tax accountant, a business incubator may recommend one. Business coaching is also a hallmark of business incubators. Business incubators are also known as business accelerators when they’re geared more towards jump starting businesses than engaging with businesses that are more established. The National Business Incubation Association has more than 1,400 members in the United States and a total of 1,900 members in 60 nations.
    Government grants and/or subsidies. Let’s face it, small businesses are good for the government. They create jobs and services as well as pay their taxes. Hence, the government offers some capital opportunities; however, the criteria is often narrow and the competition is often stiff. Some grants and subsidies require a detailed breakdown of what the money will used for, matching funds, how your work or business is significant and how it will help others, and relevant experience.
  • Crowdfunding. Crowdfunding has been around since 2008, but only recently has gone mainstream. Crowdfunding is individuals who come together to finance a venture. Most recently, it’s referred to the online source of funds that are usually anonymous or donated by strangers for a cause or a business venture. Crowdfunding is in essence donations to your business since most donors or backers don’t receive any ownership of the company or receive any of the profits. Most individuals donate because they believe in the product being developed, they want to support a cause, or they want the bragging rights of helping to fund “the next best thing.” Believe it or not, this works. The most-funded Kickstarter as of the first quarter of 2015 was the Pebble smartwatch. Between two campaigns. Pebble raised over $30.5 million in crowdfunding just by giving away products.
  • Equity crowdfunding. Not to be confused with normal crowdfunding, which is donation-based, equity crowdfunding enables individual investors, angel groups, and other capital funding companies to invest in the securities of private companies, and participate in their rising value and profits. The advantages to equity crowdfunding is small businesses and startups can raise funds from a much broader group of people, as well as get feedback on their products and test the market for their products in a relatively low-cost environment.
  • Bank loans. The most traditional source of funding for small businesses is bank funding, however, is often the most difficult to obtain because they are so risk averse. Usually, your company must have a sound track record and excellent credit. A great idea such as the next iPad will not cut it; a solid business plan will. Most often, a personal guarantee from an individual will be required if for some reason the loan enters default status.
  • Credit capital and/or credit consulting. Credit capital is where you leverage your credit in order to obtain loans, which can be distributed as one lump sum or as a steady monthly cash flow. The International Association Of Credit Engineers helps you obtain start up capital from both credit capital and credit consulting for a fee that relative to the money you are getting.

Why do you need different sources of funds? Financial institutions, namely banks, are inherently risk averse. They don’t want to to see you’ve only got one source of financing — them. That means they are on the hook if you fail (and we all know the statistics of business start up failure rates). Plus, having access to more than one source of capital is an advantage for you, so if one source discontinues its funding, you won’t be left out to dry.

This is where The International Association Of Credit Engineers can play a pivotal role. We are just another source (and perhaps your best source) of capital funding for your business. Through our credit capital and credit consulting options, we leverage your credit to gain you access to the capital you need. Having more than one source of capital has no downsides to businesses. With the ever-changing market conditions, your business needs can (and most likely will) shift on a moment’s notice. When that happens, you’ll need capital fast, usually from one of your funding sources. The International Association Of Credit Engineers endeavors to be one of your sources of capital. Contact us today to learn more!