Whether you’re looking for business start-up funds, expansion funds or you need money to keep your company together through difficult times, financing a business is a challenging task. And given the current economic climate, securing funds has become tougher than ever. However, you mustn’t lose hope. The success of your business depends on your perseverance to find a suitable financing solution. Here are a couple of ways to meet your business startup financing needs.
1. Sell your assets – Based on current business statistics, 68% of business owners get their start-up funds from their own pockets. Even if you don’t have enough liquid assets in your checking or savings account, there are other things that you can do to use your assets to finance your business. You can sell valuable or expensive items that you don’t need. You can auction some of your grandparent’s antiques and jewelry, sell your car and rent a new one or buy a smaller and less expensive vehicle instead. If you own a life insurance policy, you can borrow up to 90% of its cash value at a low-interest rate.
2. Get an angel investor – A person who will agree to help finance your business is surely ‘heaven sent”. However, attracting an angel investor may not be as easy as it seems. You need to have market assessments, analysis and good marketing and sales plans to do it. Even young companies are expected to demonstrate a high level of expertise and deep understanding of the market that they want to penetrate. Remember that when you accept money from an investor, you are giving up partial control or ownership of your new business.
3. Apply for a loan – Getting a loan is a time-tested way of financing a business. However, not all business owners succeed in getting a loan. Therefore, you need to get all the help you can get when applying for one. You may want to consider consulting with commercial business lending and finance specialists to help you increase your chances of having your loan approved.
4. Raise money from your relatives and friends – Another common way to fund a start-up is to turn your family and friends into your creditors. However, you must also consider the possibility of jeopardizing personal relationships. To avoid this, you need to present formal financial projections and assessments as to how and when they will get their money back. This also shows that you are really taking your business and their money very seriously. You should also explain the how the credit arrangement will be structured.
5. Use your credit card – When used responsibly, your credit card can help you with occasional financial situations. However, this can cause some serious business risks. If you fail to make arrange regular payments, you will have poor credit scores. If you pay just the minimum amount monthly, you are likely to get into a credit hole that is usually difficult to get out of.