Funding and keeping a business running may really put you into test, especially if you are running a small business. Getting financial support from financial institutions is a challenge enough to scare you away. You should get information on where to go and what to do to succeed in getting funding to keep your small business going. If you have to get a loan from the bank, it is wise going for the banks which consider small business owners in offering their loans.
Banks and credit unions. Banks are not always easy to crack when it comes to small business lending. It goes without saying that you’ll need a firm business plan and a squeaky-clean credit record to get approved.
Your first stop should be a bank that’s familiar with you or your industry, or one that’s known for having a soft spot for small-business lending.
It’s a good idea to seek out one that offers Small Business Administration (SBA)-guaranteed loans; check the “Local Resources” page on the agency’s website (Sba.gov). SBA-guaranteed bank loans tend to demand a lower down payment, and monthly payments may be more manageable.
Do not burden yourself or your business by quitting your daily job to let the business shoulder all your needs. Give it time to pick up as you carter for your financial needs from your job, and the business will emerge fast enough until you can settle to doing it on full time basis. You can also run your business from home as a starter, so as to avoid the burden of renting premises, furnishing and the others even before the business starts paying you back.
If you need a steady source of income to meet your financial obligations (and keep your family covered by health insurance) start the business as a part-time venture. Don’t quit the day job until the part-time business has a steady flow of customers and profits.
Start the business from home. You can start your business for much less money if you don’t have to foot the bill for office space and utilities for an out-of-the-home office. While you may not want to advertise the fact that you work from home, you will have plenty of company. According to the US Small Business Administration Office of Advocacy, 52 percent of businesses are homebased.
Sourced from: http://www.businessknowhow.com/money/startup-money.htm
Raising money for a company is never an easy task. There are a number of methods you can take to raise some few more dollars to boost your company’s growth or to revive it if its t the verge of shrinkage. However, some of these methods are costly, and not all of them apply to every state of the company, others are better for upcoming companies than declining ones.
This method allows you to sell your accounts receivable to a third party (i.e. The Receivables Exchange) for immediate cash. It’s a $150 billion industry and goes back to the ancient time of Babylonia. Remember: Factoring is expensive since it can cost up to 15 percent of the receivable. This may work for a growing company, but is not a method of financing for a company that is shrinking or losing money.
2. Retirement accounts
Borrowing money from your IRA or 401(k) can be tempting. First consider a 60 day interest free loan from it. There are no fees if it is paid back in this time frame. Remember: This is your retirement money, so using it is risky and potentially devastating if you lose your business.
3. Government grants
These programs require research at local, state and federal levels. According to Steve, these agencies include the USDA, the Department of Commerce, and the Treasury Department. They come with names like SBIR, STTR and SBIC. Remember: Typically they are very specific and technical in nature and come with reporting strings attached.