You may have a great idea for a business, but without funding, it might never get off the ground. Most businesses require equipment of some sort, along with an advertising budget and a staff. Money is needed for all these things. Here are some ways you can get funding for your business.
Peter Comisar exhorts those who want to start their own businesses to start saving now. The money you save and contribute to your dream enterprise will be a substantial portion of the capital raised. No one believes in your business idea as much as you do, so put your money where your mouth is. Save up anywhere between three and six months’ worth of expenses before you start. Think of it as a long-term investment for your future.
The Small Business Administration
The Small Business Administration, also known as the SBA is a government program designed to help both startups and small businesses. You’ll be required to provide one-third of the funds yourself, and the remaining two-thirds must be guaranteed by personal assets.
You can apply to a commercial bank for a small business loan, but be aware that banks aren’t terribly keen on loaning out money for start-up businesses. You’ll probably be required to pay back the loan over a period of ten years, depending on the lending institution.
A venture capital firm takes the money from individual investors and loans it to people wanting to start a business. Because staff members of these investment firms are responsible for bringing a good return for their investors, they’ll want compelling proof that your business could be a successful one before they advance you any money.
Angel investors are individuals and groups of people who loan money to start-up companies like yours. Again you will need to prove that you have a viable business idea and it’s likely to succeed before they’ll provide you with any money.
Friends and Family Members
Your friends and family members are the ones who know you the best and who are rooting for you to succeed but think long and hard before accepting money from people you know and love. You’ll be under tremendous pressure to make your business profitable, and if things go sour, it could put a damper on your relationship.
If you’re ready to start your business, these investment sources could be the way to get the funding you need for business success.