From DEMC.com
The Top 6 Ways to Get Home Business Financing
By Daegan Smith
Mar 1, 2006, 10:00
Once you have identified the 'big ticket' business idea that
is going to work for you, it starts raining fire to get
appropriate financing for your project. The keystone to
building a successful business is your ability to raise hard
cold cash. You may be planning a shoestring budget for your
start up but even then every business needs some working
capital for building inventory, registration fees,
insurance, for buying office equipment, maybe even space.
For a smart home business owner there are several ways to
raise capital for the start-up.
We have summed up some of the most obvious ideas for funding
and some not -so-obvious ones as well. If you have a robust
business plan at hand and can identify what is the best
source of raising capital for you, it shouldn't be all that
difficult to get someone to show you the way to the vault.
1. SBA Loans: The Small Business Administration is a
government organization working towards promoting the small
and home business segment in the US. Though SBA doesn't
issue grants or make loans directly, it is still one of the
best sources of funding for the home business owner. The
reason is that SBA guarantees loans made by private lenders
to you as a home business owner. One of the biggest problems
you will face as a home based entrepreneur looking for
funding is trying to prove you are not a fraud and have the
capability to return the investors' money. So the SBA
guarantee reduces or eliminates the risk inherent in a new
business venture, gives credibility to your business and
makes it easy for moneylenders to forward money to you.
For more information visit the SBA site at:
http://www.sba.gov
http://www.sba.gov/financing/index.html
2. Commercial banks: Taking a loan from a bank is a good
option because banks don't require you to turn over equity
or company control. However, you must have the confidence
and a strong plan to make your business start making profits
regularly or else it can get sticky paying the bank loan
back. To get access to bank loans you have to have
collaterals and must be able to prove your capability in
your start up area.
3. Personal Saving: This is a favorite with a large
percentage of first time entrepreneurs because it is the
easiest way to get money (if you have it!), and you have no
liability to any outside lenders. So if you've been planning
for your home business all along and have set some money
aside, use that to kick start your venture. An ex-colleague
who turned a home business owner recently decided to have a
garage sale of all the stuff they didn't need in the house
anymore. I kid you not...they raised a sizeable sum in just
one weekend!
4. Family and friends: Borrowing from family or friends is a
good idea when the amount you need is relatively small. It
can be clubbed with part of your own savings and novel fund
raising ideas like a garage sale to help finance your
business. This is an easy way to raise funds, as these are
the people who know you well and need fewer assurances. It
is also unlikely that they will drag you to a court if your
business takes longer to get profitable and repayment is
delayed. But take care that money does not sour your
relationships; be professional in your dealings with them
and get a formal agreement drawn up in order to put the
terms of the loan in writing.
5. Venture Capitalists: Venture capitalists are professional
investors who may be in charge of a large pool of capital
gathered from a range of sources. These firms invest in new,
even high-risk or speculative businesses without a proven
track record, with the potential for rapid growth and high
returns in a short time. Take a look at www.vfinance.com to
get you started on this line of credit.
6. Angel Investors: Angels investors are relative to venture
capitalists and usually less demanding in the returns they
expect. These are private investors who expect their
investments to make more money than through the traditional
markets. An angel investor could be your doctor, accountant
or attorney who seek out new businesses to invest in return
for equity ownership. Also see: www.angel-investor-news.com
Some other good sources of funding are Industrial banks,
home equity loans and loans on credit cards. Some other not
so obvious ways of raising capital can be equipment leasing
and advertising. Another area, which you can explore, is
personal grants from corporates. For more information take a
look at:
http://www.fdncenter.org/funders/grantmaker/index.html
So arm yourself with a solid business plan, determination
and the right kind of information on what investors are
looking for. You will hit the ground running with some of
these ideas above.
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Daegan Smith is the Author of "Internet MLM Success" - The
Next Generation in Network Marketing! Learn the Secret to
using the Internet to Exploding your Downline Growth the
Simple, Fast, Rejection-Free Way!" For the exciting
Details Click Here NOW! =>
https://paydotcom.com/r/2410/demc/191226/
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