Starting a business from the ground up requires hard work, dedication, and perseverance. It also requires capital! While we’d love to say that we all have the money needed to fund our own business ventures, the reality is that most of us need a little help from banks, friends, and family to turn our dreams into reality.
For an entrepreneur with many things on the plate, it can be hard to sort through the many financing options for starting a business and locate something trustworthy and lucrative. It would be great to line a room full of investors and let them duke it out after your killer sales pitch, but this might not be the way things happen for you. How can you find creative sources of funding to get your dreams up and running and provide you with enough disposable income to continue to build? Where can you look for some extra cash when you need it?
Consider Using Lines Of Personal Credit
When you are in a pinch, it might be necessary to use lines of personal and business credit that you have established to help you make ends meet. If you’re a military veteran you could also see if a VA loan could work for you. If you are confident that your idea will continue to flourish and grow, then you can invest your own money with confidence, knowing that you will get it back several times over once your business really takes off. Taking out a home equity line of credit is another option for using personal credit to fund your business.
Borrow Against Your Life Insurance
Are you healthy? Do you have whole life insurance? Your life insurance policy may have a cash value—checking to see if you can borrow against it with minimal penalty is one way to generate additional capital without taking it out of your own pocket. If you have owned the policy for at least three years, you are eligible to take out a loan against the policy; check with your insurance agent for details.
Family And Friends
Giving important people in your life a share in the growth and success of your business is another way to gain financial support. While your parents may still be reeling from the shock of paying for your college education, it might be worth considering approaching other extended family members or friends for this exciting opportunity. Make sure you are both comfortable with borrowing or gifting terms, as this can get sticky if your business does not take off as quickly as you would like it to. Let investors know that you are in it for the long haul and that you intend to put their investments to good use.
The pawn shops of today are all business; not the seedy places your parents and grandparents went to for extra cash in a flash. If you have items of value that you would consider parting with for some additional startup capital, this could be one way to get it done quickly and efficiently. If you don’t have time to pound the pavement and sell your wares, consider using an online pawn source for a quick turnaround. Make sure you check with the Better Business Bureau to find out if you are dealing with a trusted site.
Find Yourself An Angel Investor
If your business idea is the next “hot ticket”, you might just attract the eye of an angel investor. An angel investor is an individual with capital to burn, looking for the next big idea in business. His investment is your gain and his; as he takes an interest in you and your products, he agrees to fund your project for a certain amount of investment in the company. Win-win; you get the experienced eye of a watchful businessman watching over you, and you get capital to boot. Start building!
Finding sources of capital should not be stressful; if you are passionate enough about your idea, and you believe that the world would benefit from your business ideas and development, then it will be effortless to pitch your plan to potential investors. Dream big, believe in what you are creating, and start asking! You never know until you try.
Are you thinking of investing in a franchise to help your start-up? Check out our helpful tips here!