You have spent long hours, weeks and even months thinking about it. In terms of research, it’s a yes and you did find that there is a ready market for what you are about to offer. The business plan and all projections are in place. However, you have hit a snag; there is no capital to finance your great ideas. What do you do now? Such is the dilemma faced by many would be entrepreneurs. Think of how many potential start-ups which have had their plans shelved. Just like you, the people who conceived ideas about their formation never went beyond the idea stage.
The majority of entrepreneurs who start small businesses usually do have their own savings and are looking for an individual or institution to support them. If you are about to lose hope, here’s the much needed lifeline. There are multiple ways thorough which you can raise cash for your small business:
1: Bank loans for small businesses. Though banks shy away from lending money to borrowers whose background they know nothing about, there is still a way out. There are financial institutions the fund small businesses. In order to qualify, you must have a well drafted and thought out business plan. The plan must convince the financier that your business will make enough money that will repay the loan installments. Requirements vary from one bank to another. The key lies in showing the banks that you are up to the task and they will get their money back.
2: Friends and family. This has been successfully implemented in the past. Your family members and close friends do have your best interests at heart. They believe in you and would be more than willing to give you the cash. You should approach them respectfully and discuss your plan in a comprehensive way. It is like you are giving them a stake in the new business. Give them details of how you will get back their money. Such money is borrowed on trust but you will need to write down the terms and append your signatures. Make sure you make good your promise as these are the last people you would want to disappoint.
3: Venture capital firms and angel investors. Both work in a similar fashion. They will lend you money upon going through your business plan and the attached projections. In essence, what they are doing is investing as partners in your business. For their trouble, they expect to offer shares or a stake in the ownership of the new firm.
4: Credit cards. You can apply for such cards where the bank offering them charges interest at 0%. Take the card for the period set. When it comes to an end, change the card. Do this repeatedly until you are able to reach your optimum level of capital. What is happening is that you borrow money at no interest. However, if you use this option, you should tread carefully and exercise a lot of self discipline. At the end of the day, it is a loan. If you borrow uncontrollably, you might find yourself with a loan that is difficult to service. It is important to work with the right services to accept credit cards as well. USMS.com has an excellent system to provide companies with credit card processing services.
5: Government support. The government offers some grants to finance start-ups. There is fierce competition for them as a result of their non pay back status. That is, once you are given the grant, you do not pay back. The process of applying for these grants is lengthy. All the same, you can give it a try. To learn about government assistance, check out the Small Business Administration website to apply for a loan.