If you are starting a new business, the first thing that you will think about is how to find money for starting a business. The options of where to get funding for your business will depend on how much funds you require.
Here are some ideas on where to get the money you need for starting a business:
If you only need a few thousands, you can make use of your credit cards or applying for a new credit card in order to finance the business that you are setting up. Make your credit card strictly for business use only and that’s one way to control and trace your business expenditures as well.
Another way to get the money for starting a business is to utilize your home equity loan. You can avail around $5,000 to $10,000 through this loan. The good thing about home equity loans is that their interest rates are far lesser than most than credit cards. The only downside with home equity loan is, if you will not be able to pay the loan back or if your monthly payments fall behind its schedule, the possibility of losing your home is very high.
You can look for an investor who might be willing to support your business. These investors are affluent people who invest money worth around $50,000 to $100,000. Often times, the company that they choose to put in money with are the hi-tech types or the one that they think will grow rapidly. However, you must be aware that these investors will have to be involved in the daily supervision of the company.
A venture capital is ready to invest billions of money, but just about twenty percent of the companies who receive this capital are for start ups. The usual investment granted by any venture capital firm amounts to millions of dollars, so it’s not suitable for small businesses who only require small capital. There’s only about 1% or less, of companies who seek venture capital who were successfully granted the funding. To be exact, that’s merely around 4,000 companies a year.
You can also think of trying other options available for financing your business like acquiring your products through consignment deals, royalty financing, or purchase order financing.
A lot of small businesses believe that a government grant will be their only chance. Sorry to say, but there are only a small number of government grants offered for businesses. And mostly, they award grants only to reputable companies in the field of either technical or medical.
To conclude, money for starting a business is found in many places and it should be the first undertaking that any people in business should accomplish.
Moreover, setting up a business takes a convincing estimation of expenditures, planning assets, and of course, funding needs. Bear in mind that one leading reason for business failure is the lack of capital to make the business function properly.
Therefore, financing your business denotes conquering the high initial outlay, and ensuring that you have set aside sufficient money to cope with operating expenses for the first few months as you are still building up your clientele or still establishing your product or service to the marketplace. Nothing is more discouraging than seeing your business go down the drain when it could have made it big with a little more fund at the right time.