SMALL BUSINESS STARTUP LOANS -
6 Sources of Money
(See Related Articles at Bottom of Page)
Small business startup loans can come in many forms. From government loan programs to relatives with money to invest, here are 6 sources you might want to consider for financing your business.
1.Your Own Pockets
Believe it or not, this is the most popular source of startup capital. Don’t have a vault full of cash? Many people mortgage homes or sell property to raise the funds they need. Though it may be high risk, for some it is the fastest, easiest and most reliable way to raise startup money.2. Relatives and Friends
Borrowing from family and friends is actually the second most popular source for startup financing. Know relatives who believe in your business idea and have a little stashed away? They may be your best source of funding at reasonable terms. By the way, no matter how close the relative or friend, always put your agreement in writing.
This helps avoid misunderstandings later. 3. A Bank Line of Credit
Hopefully, you have a good relationship with at least one bank. Though a line of credit isn’t recommended as a primary source of small business startup loans, it is an essential fallback position should you need a quick source of cash. 4. A Bank Loan
This can be bank or credit union financing. You’ll have to be ready to make a strong impression with a well thought out business plan, tax returns and a solid credit rating, so be prepared when you meet with you bank’s loan officer. 5. Government Programs
The Small Business Administration (SBA) has several programs that can help you get financing. See the article:
Government Small Business Loans - A Simple Explanation
on this website for information about SBA loan programs. 6. Private Venture Capital
Sometimes called Angels or Venture Capitalists, this could be a good source of money for you. These investors will scrutinize your concept and want a high return on their investment. They may provide you traditional debt financing (a loan), or want a piece of your business (equity) in anticipation of future return as the business grows. These loans may be more difficult for a startup to get. Venture Capitalists will want to see a well prepared business plan with financial projects and a strong management team in place.
Doing a simple Google search for small business startup loans is a good way to get a feel for your options. Also, be sure to read the related articles on this website for more information.
-by Andrew Sokol
Andrew Sokol is a Business and Marketing Strategist.
He is also the publisher of this website.
Andrew is available for private consulting and public speaking.
He can be reached by clicking
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