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Equipment, Finance & Accounting, Retail & Inventory, Starting A Business

5 Ways to Invest in Equipment or Software for a College Side Business

5 ways invest in equipment for college business

This is Part 12 of our Back to College series, which aims to help college students thrive as small business owners. In Part 11, we covered creative ways to fund your business. To view all the posts in the series, click here.


5 Ways to Invest in Equipment or Software for a College Side Business

One of the best ways to slowly move into entrepreneurship in a safe and low-risk manner is to start a side business while you continue working…or while you pursue your academic studies. In fact, starting a business while in college can give you valuable experience you can use once you graduate, and the profit you make can help foot your costly university bills.

Still, depending on what type of side business you start, you may need expensive equipment, merchandise or software to really ramp up your business efforts. With a ramen budget, how can you possibly afford such expenses?

Before you give up your dream of entrepreneurship, consider these creative ways to cover your startup costs.


  1. Be Smart with Financial Aid

If you’re eligible to take out more in student loans than the cost of your semester, or you receive additional scholarships, don’t fritter away that extra money at the clubs. Instead, invest it back in your business.

The important thing to remember here is: you’re taking out a loan for your business. That means you’ll need to pay it back. But with 30-year terms and super low interest rates for student loans, you won’t find a better financing deal ever again in your life. As your revenues pour in, allot enough to pay back what you took out. This will reduce your overall student loan interest if you pay it back quickly rather than over the 30-year period you pay the rest off.


  1. Get a Line of Credit

It may be daunting for you to take out a loan for tens of thousands of dollars all at once, in which case, a line of credit may be a better option. When you apply, you will be approved for a maximum amount, but you only take out what you need when you need it.

So let’s say you’re approved for $10,000, but you just need $2,000 right now to buy equipment. Later, you may need an additional $1,000. As you take out money, your repayment schedule kicks in. Pay back what you borrow, and you can always borrow more.

A line of credit is a great way to manage your cash flow, especially in the early days of your business. However, not all lenders are created equal for lines of credit. If you don’t have a lengthy credit history (most college students don’t), a traditional lender may not approve your application. But an alternative lender will base the decision to give you a line of credit on fewer factors, primarily you being in business at least a year and earning at least $50,000 annually. If you meet these qualifications, a line of credit could be a good fit for your business.


  1. Earn and Grow

Again, this will depend on the type of business you have, but if it’s possible, you can start small, without those bigger investments, then as you increase profits, you reinvest those back into the business.

Let’s say you have a company that sells custom t-shirts. You want a $10,000 machine that will quickly and cheaply print those shirts, but you don’t have the funds. So for the time being, you send those shirts to be printed with a local company. Yes, it will cost you more per shirt at the start, but know that once you save enough, you can bring your per-shirt cost down drastically and boost your profit margin rapidly.


  1. (Cautiously) Borrow from Family

Your college years are a time of exploration and adventure. Your family may still be providing support to you, and if they have the capacity, they could be a good source of a small business loan. Find a family member who believes in your business idea (and make sure it’s well developed, with a solid business plan and sales projections), and hit them up for a loan.

Here you want to tread lightly, because mixing business with family can go sour quickly. Treat this as any other type of loan and set up a repayment schedule (with interest, if the lender wants it). Stick to that repayment plan or you’ll risk jeopardizing your family relationship.


  1. Use Credit Cards Carefully

Another way to quickly access the funds you need for larger investments is with a credit card. But like you should with all financing, proceed cautiously. It’s all too easy to let your $5,000 charge snowball into $7,000 including interest if you don’t pay more than the minimum amount due each month.

Before you swipe your card, have a plan for how you’ll pay back the credit card transaction. How much can you afford to pay toward that expense each month? Naturally, the quicker you pay it back, the less you’ll pay in interest, so plan to be aggressive in paying it off.


Before you assume that you can’t afford major expenses to grow your side business, explore these financing options. Taking a loan out early on could be the best decision you could make for your fledgling company.

What expenses do you need to cover for your side business? Do you have a plan for how you’ll pay them?