If you have always wanted to work for yourself, now is the time to pursue your new business venture. You deserve to do something you are passionate about, make good money, and be your own boss. As exciting as all that sounds, it can be difficult to obtain the funds you need to get started. Consider the following tips to help you raise the cash to start your own business.
This option can be risky in that if your venture doesn’t work out, you’ll be stuck footing the bill. If you are financially comfortable, however, self-financing can be a viable way to get your business started. A few methods of self-financing include:
- Selling personal assets. Maybe you own stocks, bonds, property, or family heirlooms that you are willing to part with. Selling these items is a great way to finance your business. You should, however, be wary of certain tax implications. If you don’t do your research, you might find yourself dealing with unforeseen capital tax gains from the IRS.
- Using credit cards. Buying supplies for your business with credit cards is a quick and simple financing method. Be careful, however, of letting debts go unpaid and allowing interest to accumulate. Also, you should take advantage of cards that offer cash-back/rewards programs for business purchases.
- Using your own savings. If you have a rainy day fund, now might be the time to tap into it. Using your own money is not only practical but will also show potential investors that you are committed to the success of your business.
- Tapping into retirement accounts. There are normally steep penalties for taking money out of retirement accounts prematurely. Some financial advisors, however, offer plans where you can avoid penalties if you show that you are using the money to start your own business.
Taking Out Loans
There are many different kinds of loans that can help start your business venture, some of which include:
- Bank loans. If you have good credit and collateral, a bank can lend you money with relatively low interest rates.
- Small Business Administration (SBA) loans. The SBA doesn’t directly lend money but helps startups get loans from lenders.
- Stock loans. Loans where stock is the only collateral allow you to have money readily available while still enjoying the benefits of the stock. Websites like easystockloans.com can help in your venture, as they offer stock loans for both individuals and businesses.
Asking Friends and Family for Help
If you have limited personal assets and/or poor credit, try asking friends and family for their help. Because they know you personally, loved ones could give you loans with little or no interest.
If you do end up getting a loan from a family member or friend, make sure that the terms are clearly established. It can be tricky going into business with loved ones, especially if your business does not do as well as you anticipated it would. It is important that you are both on the same page so that your relationship does not suffer.
Enlisting “Angels Investors”
In this day and age, if you don’t know anyone personally who can give you a loan, you can turn to strangers for help. It is common for wealthy individuals to be interested in funding startups. They provide capital, usually in exchange for a stake in the business.
Angel investors often offer guidance along with financing. They usually invest in businesses within their field of expertise, so they’ll be able to give you sound advice.
Take the Leap!
It can be scary fund your new venture when you aren’t sure it will work out. These tips give you practical ways to get your business off the ground, so get out there and start making that well-deserved money!
This is a guest article. Views from this article are for consideration and do not necessarily reflect the views and advocacy of this website.
Opening a business and investing can be risky that is why you should study first before risking your own or borrowed money. Previously published our own take on this topic, click link below:
The PH government is also offering small business loans to qualified businesses. Check this out:
Aside from angel investors, a similar approach that’s gaining popularity in terms of business financing is crowdfunding. Know other ways to increase your passive income (aside from doing business) and attain financial freedom sooner. Find out why WISER PINOY = RICHER PINOY. Download #10Steps to a Richer Life now!