Very few business owners can afford to run a business totally out of their own bank account. If you are not an established business, loan possibilities may be very limited. Here are a few alternatives to get financing.
To find financing for your business:
- Assess the financial needs of your business.
- Calculate the financial resources you personally can contribute.
- Prepare financial statements.
- Contact professional resources who can serve as references.
- Consider bringing in a partner with complementary talents and money to invest.
- Work out barter arrangements, if possible, with any suppliers.
- Consider what possible collateral might be possible for a loan, including unpaid accounts payable.
- Look for any business incubators in your area which might be interested in investing in your business.
- Investigate strategic partnering opportunities where a successful firm in a complementary business would be interested in investing that would be a goodbusiness partner.
- Apply for guaranteed loan through the Small Business Administration.
- Cost cut every way possible, except on the quality of your product.
- Ask friend and family to invest, giving them a written agreement on repayment.
Tips:
- Almost anyone lending money will want to know how much you have contributed. They don't want to take a risk on you if you are willing to risk your own money.
- Learn the business terminology of the financial world. Not only does it help with understanding your options, but it impresses lenders.
- The Small Business Administration has a large variety of financing options available.
