3 Obvious and 2 Not So Obvious Sources For Start-Up Funding
Funding is a major challenge to consider when embarking upon the journey to start your own business. Figuring out where the funds will come from can sometimes become very stressful. This is an obvious obstacle that ultimately prevents many people from starting their own small business.
Bank loans are usually the step that most people take when wanting to start their own small business. Banks do tend to make it tough on the every day person wanting to start their own business.
Obtaining government grants is not as easy as one may think. The US as well as other countries has numerous programs that cater to the needs of potential small business owners.
Relatives or friends
The downside to the suggestion of relatives or friends is that they very well may feel that they own a stake within your business. This of course has no legal binding however; it can create serious rifts between you and your loved ones.
Your personal savings
Dipping into your personal funds is yet another way to fund your small business. This is usually done through a cobination of pulling from savings, retirement, and home equity and is not a recommended way of funding business ventures. It becomes extremely important for a succesful business to seperate business and personal finance.
Private donations or investors
If you feel you have a great new idea for a new small business, you can possibly sell your great idea to potential investors; these are commonly called venture capitalists. The disadvantage of this method is that the idea has to be creative as well as unique; you have to literally convince the investors you are going to make money.
Trade Credit and Unsecured Business Lines of Credit
These are two option often overlooked in funding new business. Trade credit and credit lines in the name of the company are easy to obtain if your business has a strong business credit profile seperate from the owners personal credit.
Posted on July 5, 2011, in Business Credit and tagged banking & finance, business financing, business line of credit, commercial credit builder, credit savvy CEO, small business loans, start up capital, women owned loans. Bookmark the permalink. Leave a comment.