BUSINESS FINANCING

Investigating Business financing wasn't as hard as I thought. A few clicks of the mouse and I learned a myriad of ways to finance my home business. Allow me to share a few of the options for business financing I found with you

If you are starting your business from nothing, the Small Business Administration (SBA) is a good place to start. In terms of business financing the SBA does not give loans, they guarantee them. In other a words, the SBA decreases the risk a lender takes on by giving you a loan. The SBA's Prequalification Loan program is designed to help specific borrowers. Those who would otherwise have difficulty getting a loan, including start-up businesses. They assist borrowers in putting together their loan applications and once qualified, issue a qualification letter in the borrowers behalf. The letter indicates that the SBA will guarantee the loan up to 75%. There is one catch, in order so secure help from the SBA you must first prove you could not get a conventional business financing.

You can choose to turn to a traditional lender, i.e. a bank or other financial institution for your business financing. This can be difficult for a start-up business, as traditional lenders require proof of ability to earn income. It is possible with a strong business plan, but often difficult.

Angel Investors are a good choice for small business financing. They are often willing to take on a greater risk than conventional banks. They are willing to invest smaller amounts for longer periods of time.

A home equity loan is another viable option for business financing. They offer excellent interest rates and the interest is often tax deductible. You are however risking your home should your business fail and you are unable to repay the loan. Similar to a home equity loan, look into borrowing from a 401K. Your place of employment will be able to assist you in this.

For me bootstrapping was the way to business financing. My company did not require a great deal of star-up cash. I pinched and saved until I had 3 months worth of bills saved up. I went from full-time to part time at work and started my business part-time. Eventually, my business was at a place that, I could leave my traditional job altogether and focus full-time on being my own boss.

Whatever your choice, I wish you luck in your business financing adventures.