You may have an excellent business idea, but lack the funds to get the business off the ground. This can be frustrating and often results in many people giving up on their dreams. While it may be difficult to find funding, it’s not impossible. There are a number of funding sources for small businesses. Whether you opt for something traditional or something new, you can find the money you need. Here are just a few tips for finding the cash to start a new home business.
Social Lending
If you’re afraid to approach a bank about lending, why not approach your peers? Social lending is a great option for new businesses. With social lending, you put in a request for the amount of money you need and then other individuals will fund the loan with interest rates that vary from less than 7% up to 35%. You will need a good credit score in order to get the money you need (660+) and it may take a while to get the funds you need. However, this a great, non-traditional option that is on the rise.
Local Investors
Another non-traditional method is to find local investors. A trick for doing this is to explain your business and offer free services for a period of time in exchange for start-up money. For example, let’s say you want to start a beauty salon from your home. You could offer free haircuts for several years or even a lifetime.
Government Programs
Small business has become big business with the government. There are a number of grants, loans and other financial programs that have been created to help small businesses. Start with your city government then move on to the state level and then the federal level. Chances are you’ll find at least some money to get you started.
Banks
Last, but not least, banks are the most traditional option. However, you will need to have all your ducks in a row before applying. This means having a great credit score and creating a business plan. You should also practice what you’ll say so that you are able to present your business idea in a professional manner.
There are a number of funding sources when it comes to small businesses. However, knowing about several different sources can make it easier to get all the funding you need. Just remember to only borrow what you need and not get in over your head.
About the Author: Brandon Reauish loves working with small businesses as they work to get their projects off the ground. He works closely with a logo design company to ensure each business he works with has a clearly defined brand.