Whether you are just starting a small business and need start-up money to get going, or you currently own a small business and need more operating cash, we’ve come up with the most common 8 ways to finance your small business. Not every one of our 8 ways may be the right cash-raising solution for you, but just knowing that you have options should give you a sense of ease as you continue to pursue your dreams of success and keep your business growing.
- Savings – Of course this is a no-brainer, but dipping into your savings is in many cases the quickest and safest way (consider it a no-interest loan from yourself) to get that additional capital for your small business. But make sure to leave some money in your savings as an emergency fund if it all possible in case of an emergency.
- Family/Friends – Many times your family and friends will be willing to help you out financially, not always because they believe in your business, but because they believe in you. Make sure you do write up a contract, if the money they give is not a gift, on how you will pay them back, in what time frame, and what happens if you aren’t able to, so that you can maintain a good relationship with them no matter what.
- Bank Loans – Either a personal loan or a business loan can be applied for at banks. You may need to bring a business plan with you depending on the amount you are asking to borrow and the type of loan you apply for. Inquire at multiple banks about their loans, rates, and requirements to get the best deal.
- Credit Cards – Obviously another quick way to get cash, but usually the interest rates are high and you will have to start paying it back immediately. Make sure you’re able to make the monthly payments, or else you may find yourself having problems down the road with your credit.
- Investors – You can always look for investors for your small business to provide some capital or operating cash. They will want to see a business plan, and of course they will want something out of it, either a piece of the business, interest on their investment, a combination of both or more.
- Get a Second or Part-time Job – Maybe, just maybe you’ll have to get another job to raise some money on your own. If so, a second or part-time job may just do the trick. It may be at the corner store maybe you can offer some quick consulting to local businesses in your area of expertise.
- Business Grants – There are many types of small business grants available if you’re willing to do the research and spend the time applying. A few places you can start are your local government, the federal government, and many larger corporations offer small business grants as well. You can start out by searching on the internet or at your local library.
- Get a Partner – Try partnering up with someone that has complimentary skills that would benefit your business. Maybe they can offer you money to buy into the business, or free up some of your time so that you can get that second or part-time job you need as well.
So as you can see, there are quite a few ways to finance your small business. All have their pros and cons and it’s up to you to choose which one is right for you and your goals. Good luck!
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