How to use other people’s money to launch a business?

No one wants to use their own money while launching a business if they do not have to.


Most micro businesses require $3,000 to get started, according to the U.S Small Business Administration. It is not a low number for just getting off the ground.

First-time entrepreneurs can have different financial situations, but no one wants to use their own money if they do not have to. So why dom’t you consider making money through leveraging other people’s money?

“Using other people’s money also buys you time and allows you to do things in your business, you may not have been able to do if you financed it yourself. You have more options, increased reach, and the ability to make a bigger impact much quicker as you start your business”, Alyssa Gregory wrote for The Balance Small Business.

But how to start? Whose money would you use? Consider these following tips for your success of launching a business.

  1. Use Credit 

Think of business credit cards, it is for sure the bank’s money, but it’s a form of borrowing. Many experts point out that they have plenty reasons to suggest new business owners to rely on business credit cards.

The credit limit of a credit card will typically be three times the amount of your highest personal limit. If your highest personal credit card has a $10,000 limit, you can qualify for up to $30,000 in business credit. Ofcourse you have to pay back the money, but at least with business credit card, you have a bit of delay before the first payment is required.

9-12 months is the period that many business credit cards have a 0% interest rate. During this precious time, you can start to turn profit in your business and pay off the loan before a cent of interest is accured.

What more? Some business credit cards allow you to use the points from your business investments to pay for flights, hotels, and rental cars, and can even unlock cool benefits like lounges at airports or even co-working spaces.

  1. Grants, Loans, And Awards

Getting updates for your business is important, especially in an uncertain time under Covid. Experts always point out that information is vital to your success, and there is no such thing as too many resources when it comes to financial health. These resources could include stimulus packages, government loans, subsidies, grants…

But when it comes to loans, please note that your credit score matters for it reflects your brand. It can be the key to access credit or loanjs for your business. That’s why you should first raise your credit score before you can earn more money.

Besides, there are many more resources that you could get for your business, so stay tuned to know when and where the money is awarded. Grants does not require to pay back, so grab it as quickly as you can.

  1. Investors

If you still fell lack of resources, then find an investor for he/she may be your savior. During the pandemic, it may sounds crazy to ask for an investment, or atleast you can hardly find an investor who is willing to take risks giving away their money. But believe it or not, resource still abound.

What you need is something like ACE-Net, network developed by the Small Business Administration to connect investors with entrepreneurs. There are many venture capital funds which are willing to help your business out there. But remember that these investors are also seeking oppoturnities like you, so be sure that your business model can get a win-win situation.

Ofcourse, these investor will begin with a small amount of money in the early stages of your business, then they would ask you to pay for greater money in equity.

And once again, the importance of your credit score. Investors are just like banks, they want to assure that you have the capability to pay them back although they invest in your business because of its value preposition. That’s why you should rely more on your own business credit lines or grants or award money.


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