A look at atypical small business financing
If you want to start your own small business and you need money there are many places to turn.You may not want to get a bank loan, or maybe you didn't qualify for a bank loan.That's ok, there are still options.
Here are a few options other than your typical bank loan:
- Finding personal loans.Find people that have figured out the business world and have some money to spare.See how much money they will loan you and work out a payment plan.Everything should be in writing.
- Asking friends and relatives.Go to people who are close to you for money.Show them your passion and enthusiasm.Some people are not comfortable with this, try to overcome that.This may be your only interest free option.
- If you can't afford all for the equipment and supplies you are going to need, try leasing them.Companies usually have a lease policy that can help you with all of the up front costs of starting a business.
- A slightly more expensive idea for financing is factoring.It is not a very widely used practice because of the cost.If you look into this you need to be very well informed.
- Look into venture capital.They can work great for businesses that will have high profits within five years.Venture capitalists are usually looking for a five year investment.Where does your business plan put you in five years?
- Consider going public.Sell stock for your business to investors.There is one difference here, even after their debts have been paid off investors will still receive the percentage of the profits that they own.There is a lot involved in this, it is a huge task.Know what you are getting into before hand.
- Take a look at SBA loans.If you think about it, they are the Small Business Association, they probably have your interests at heart.
- You may consider selling equity for your financing needs.If this is the case you need to make sure you look at all of the legal obligations with it.This is very complex and can be a lot to handle.
- There may be an angel investor that would want to help you.You may even find an angel network or group.
- Think about your credit cards.How much money do you have if you add them all up?What about the equity in your home?Savings?If you added up all of your available money you might just have enough to finance yourself!Even if you don't have enough money to finance all of your costs, you could take a huge chunk out of the amount you do need.
- If none of these options seem to work for you there are many online options.Any general search should bring you many more options that are available.
Keep an open mind about financing.It is not always easy to feel like you are begging you money.Your attitude will make a difference in the minds of the people you talk to.Have a solid business plan and know how you are going to pay the money back.
Be prepared when you begin looking into any of these options.Have all of the information ready and available when you are talking with anyone about getting financed.You will such an advantage if you are prepared and know what you are looking for.It also never hurts to be excited and enthusiastic about where your small business is going.