If you are a budding entrepreneur and want to learn how to get financing for a business, there are many resources available to help you get started. While the process may seem daunting, there are a variety of paths you can take to secure funding for your new business. Read on for a guide on how to turn your idea into a viable entity and enjoy the autonomy and creativity of being your own boss.
Consider a Small Business Loan
One of the most popular ways to get financing for a new business, a small business loan can provide a large amount of capital at affordable interest rates. According to Forbes magazine, you have a much higher chance of getting approved for a loan by going through a small local bank or credit union as opposed to a large national bank.
Use a Credit Card for Funding
If your credit is good and you can get approved for a credit card for the funding you need, this may be a viable way to finance your small business. Be wary, however, if you choose to go this route; interest rates can be high and fees and penalties are astronomical if you miss a payment. However, according to the National Small Business Association, about half of new ventures are funded this way.
Begin Selling Your Product
If a product is your business venture and you can generate interest through creative marketing, product presales can be a great way to raise the needed capital to actually produce the product as well as drive interest for your business. This is done by increasing your customer base and your chances of qualifying for additional funding. This route can be dangerous, though, if you’re not able to actually fill the preorders in a timely manner.
Leverage Your Assets
Even if you don’t have a large amount of liquid cash to draw from, you still may have assets that can be used to fund your business. Consider taking a home equity loan on your property, selling jewelry, cars, or other valuables, cashing out or taking a loan against a 401K, or taking a loan against your life insurance policy.
Look Into Crowdfunding
If you have a viable pitch for your new business, you may want to take it to the masses. Online “crowdfunding” sites such as Indiegogo.com and Kickstarter.com encourage users to donate to great ideas. You may offer a benefit for those who donate, such as a free month of service or free products.
Access Available Resources
Look into the local, state, and federal resources available to small business in your area. The local chamber of commerce is a good place to start. The federal government’s Small Business Administration also maintains a wealth of resources for those interested in started a new business, including business plan templates, advice, and subsidized loans.
Related Resource: How To Become a CEO
If you’re creative and have an amazing idea, there are plenty of ways to get financing for a business.
