Having the passion, drive and plan to start a small business is the easy part, having the funds to start and continue running your business holds back many entrepreneurs from their dream to be business owners.
So where will these funds come from? Here are a few options to get your business off the ground.
Self-Funding – Tapping into your personal savings, investment accounts, or even securing a second home loan to drum up some capital on your own to start. A big advantage of self-funding is that you have complete control over your business and won’t be held liable.
Individual Investors – Venture capitalists and angel investors fund your start-up out of self-interest, giving you money upfront in exchange for a higher return when your business is established. The advantage of individual investors is you are guaranteed the sum you need to start-up. A disadvantage is you might have to give up a percentage of your ownership of the business.
Small Business Loans – Small business loans are fairly common and easy to find in your area with a quick search on Google. The process to get a small business loan is relatively simple, but you have to be aware of the stipulations. The interest can be significantly high and your personal credit has to be in good standing.
Line of Credit – You can open a line of credit with most banks and financial institutions. Without a business plan, expect a low credit limit and high interest rates. The more established your business becomes, the better the terms of your credit will become.