Learn about the various crowdfunding platforms, private capital sources, and personal resources you could use to find funding for projects.
78 percent of American workers are living paycheck to paycheck. And 55 million Americans have no money in savings, whether for an emergency or any other purpose.
If you’re among these people and you want to initiate a project–perhaps a small business or a vegetable garden–you might not be able to raise the funds you need on your own.
What should you do? Abandon the project? Sit on the idea until you have access to enough capital?
As a savvy person, you’ll do all you can to get funding. To give you a helping hand, here’s a guide on how to secure personal funding for projects.
Take Out a Personal Loan
If you’re a credit-active consumer, chances are you can secure a personal loan from your bank.
Although banks have long had a reputation of playing hardball with people looking for loans to start a small business, obtaining a personal loan shouldn’t be a problem. If you have a job or proof of regular income and your credit score is good, you’ll be approved.
And if your credit score is bad or you have no credit at all, you can still get a personal loan–just not from a bank. There are several online lenders that offer personal loans for bad or no credit. Learn more about these loans before giving them a try.
Ready to apply?
But before you do, keep in mind that loans can be a double-edged sword. Ensure you have a solid repayment plan before applying for the loan, especially if you’re not sure about the project’s potential returns.
Reach Out to Friends and Family
Most of us have that rich friend or relative.
If you do, now is the time to reach out to them and ask for a financial favor. Sure, borrowing money from other people takes some humbling, but if you’re passionate about your personal project, you should be willing to do whatever it takes to get funding.
After all, you aren’t alone. Every year Americans borrow about $184 billion from friends and family. And the average loan is about $3,000.
However, borrowing from your loved ones needs tact. You just don’t hit up a friend one morning and ask for a substantial amount of money.
Start by creating a project plan. This is a document that fleshes out what the project involves, capital requirements, and cash flow projections. With the plan in tow, you can then approach your friend or relative and pitch your case.
You also need to make it clear that the money is a loan that you intend to repay. Come up with a schedule that shows your repayment strategy.
If people are reluctant to accept your request, sweeten the deal. You can offer them a share of ownership in the project in exchange for their money.
Throw a Fundraising Party
Sometimes it takes money to raise (more) money!
Holding a fundraising party will need you to dig into your pockets first, but it can turn out to be an effective way to get funding for a personal project. This strategy is especially ideal for people with large social circles.
Start off by forming a party committee. You could ask two or three friends to join the committee, and the task will be to draw a plan and budget for the party.
Send out invites a couple of weeks before the party date and ensure the goal of the party is clearly stated. The theme of the party will also go a long way in helping your cause. If its summertime and most of the people in your network are millennials, for instance, you could throw a pool party.
After having fun, your guests won’t have any qualms raising funds toward your project. Don’t be surprised if the amount collected exceeds your expectations!
Give Crowdfunding a Go
Crowdfunding is fast becoming a popular and effective way to raise money for a range of projects, from social causes to business startups. By 2025, total crowdfunding raised globally will hit $300 billion.
This could be your gateway to the funding you need.
However, for every successful crowdfunding campaign, there a ton that doesn’t meet their fundraising target.
To give your campaign a strong chance of succeeding, begin by identifying a crowdfunding platform. Kickstarter, GoFundMe, and Indiegogo are the most popular, but there are others that cater to specific niches.
Next, craft an inspiring message. People are more likely to fund your project based on your story. If it’s moving or thought-provoking, people will give generously.
You also need to spread the word about the campaign, especially on social media. If the message reaches thousands of people or somehow goes viral, you could raise the money in record time.
There’s nothing like free money, right?
Well, wrong! Many governmental and non-governmental organizations offer grants to deserving applicants.
You’re probably thinking “what are the odds my grant application will be approved?”
Sure, it’s not easy to secure a grant and there are usually lots of bureaucratic procedures involved. But there’s no harm giving it a try. Who knows? Maybe it’s your lucky day!
To improve your chances of securing a grant, apply to organizations that support projects like yours. If your project has something to do with environmental conservation, you should look into grants offered by environmental organizations.
The best thing about grants is it is free money. You won’t worry about paying it back. However, there might be some oversight to ensure you’re putting the money into the intended use.
You Can Get Funding for Projects
When you’re passionate about something, you can turn it into a project that creates impact. However, sometimes money can stand in the way.
If you’re in this position, don’t despair. With this guide on how to get funding for projects, you now know the various steps you can take to make your dream come true.
Good luck, and if yours is an art project, here’s how to save money on crafting supplies.