For all your online business building info! , 2020-08-12 11:02:57
How to Get Money to Start a Business
One day you’ve got it, finally that great idea or invention that is going to make you rich and that will change the lives of many people. You would like to start a company that will bring your great idea to the masses.
But how do get the money for the business start-up?
Take a look at some of the options you have:
1. Personal Savings
If you have some savings and you are not using it for something else, then you can use it for your business start-up. Note: most people don’t have enough savings to use these options.
You can borrow the money from friends and/or family. This option only works well if you don’t need allot of money. See it as a business transaction, so use a contract! Only use this option if you are certain that you can repay them. Even the best of friendships can end when money isn’t repaid.
3. Bank Loan
Another way is to take a loan from a bank. In almost all cases you need to have a solid business plan. Make sure you get a large enough loan to help you trough the first year. (Most small businesses don’t make a lot of money the first year.)
4. Credit Card
Using credit cards to fund your business startup is never a good idea, because the interest rate is too high. The interest rate will cost you a lot in the long run.
5. Venture Capitalists or Angel Investors
These types of investors are only interested in businesses that can promise high returns quickly. In most other cases they are not interested. If they want to invest in your company then they demand equity in your company. Note: in most cases they also have the end vote. So if you like to do something and they don’t like it, you can’t do it.
6. State and federal grants
A small business startup can in most cases get a state or federal grant. In most cases you also have to have a business plan and present it to a commission.
But what makes a grant better then a bank loan?
The interest rate is low or zero and in most cases it is a long term loan (longer then you can get from a bank.)
As you can see there are different options to get money to start a business. Of course you can mix the options, for instance: use some savings and borrow the rest from family.
Good luck with your business startup!
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