There are many different places to find business start up funding, each with it’s pros and cons. Business funding can come from your own personal savings, from family and friends, using your credit cards, SBA loans, as well as a credit line using your home’s equity. There are also other government funded programs that can also help you.
Using your savings to for your business start up is one good idea. One reason this is a good idea is that it is money that doesn’t have to be borrowed from someone else. If something happens, and you lose your business, you aren’t in debt to anyone. It is definitely a really good place to start, but in many cases, it is not enough to really get things going.
Asking your family or friends to help you with your business start up is another good idea, because they understand you and know you better than banks or other institutions that are more concerned with whether it is a good investment, rather than your character. Friends and family can be much more sympathetic if problems arise, and can be flexible about repaying them.
Using your credit cards to help you with business funding may seem like a good idea at the time, but be careful. Business start up funding can be costly, with equipment to purchase, advertisements and other things, and it can be easy to go over your limits, incurring heavy penalties. If something happens, you still have to pay off the cards, and you can get into debt.
Using your home’s equity is another good idea to help with your business start up plans, because this is somewhat like your personal savings. This too you have to be careful with so you don’t overspend. Like the other business funding ideas, you have more flexibility, and don’t have to have a detailed business plan, like you will with other sources of capitol.
When using SBA loans, bank loans and other avenues, you have to provide a clear and detailed business plan. You have to show where the money is going, what it is going to pay for, and you also have to provide details of your income from your business, and often have to foresee this income up to two years. If you don’t have everything well put together, chances are you won’t get the money you need.
A good business start up plan can help you not only get the business funding you need, but it also helps you to know which areas you need the capitol most. A good business plan takes time and research, looking up what the exact costs for each aspect of your business. You will need it for not only loans, but any other alternative funding ideas.
There are other ways to get the business start up capitol, but this may not be in the form of actual cash payments. Vocational Rehab is a good place to get goods and equipment to help with your business, as well as other resources for your local job service. Job service may be able to help you update existing equipment, and pay for things like displays, tables, and may even help you rent a building, depending on your needs.