Finding start-up money to begin a small business could be difficult. Raising cash even for a business that seems to be making money can be a tough task too. Acquiring cash investment to fund an expansion is also tough at these times, especially when prospects think that the business idea is not good enough to multiply money exponentially.
Today’s economic climate also makes banks and financial firms nervous of lending capital funds. Cash loans for a small business sometimes can be out of the reach of many small entrepreneurs. So, when you have a good business idea, or planning to expand your business, how will you raise money? Perhaps, the following ideas could help entrepreneurs raise start-up cash.
Assets could Fund your Business
The first place to look for funds is right at home, in your personal savings and among your assets. Cash that you have saved could be used to fund your business, instead of borrowing or rounding up investors. Assets that you have acquired could be used as collateral for a loan.
If you do not have enough money saved to fund the initial start-up of your business, you should consider selling some acquired assets. One can also sell items not needed and things not being used to raise cash. There are those that use real estate properties to secure bank loans, or rent them out or sell them to raise cash. If still fund is not sufficient to start your business, consider selling some stocks or bonds, or borrow some money against your plans, and policies. A loan against your car can get you those funds fast for timely use. Selling your liquid assets, such as jewelry or other keepsakes is one way of raising the start-up money.
Try Government Funding for Business Ventures
Need money to finance your business? The Canadian Government grants loans to small business owners. The loans and grants are available to people to help them start, expand or improve their business. The government gives loans to those eligible for a loan or for a financial aid for expansion, training and recruitment.
Many governments offer grants to assist entrepreneurs in their new small business ventures. Government business loans are a viable option for seeking start-up money. Federal Government programs, such as the Small Business Administration in the US have loan programs for those in need of immediate funds. These loans may vary based on the financial need of the businessperson. Whether your need is $100 or $10,000, government-funding programs could help you get the money to start up that new venture.
Cooperatives Give Loans for Small Businesses
There are various ways to raise funds—from staging garage sales to selling stocks to renting a room in your home. You can also approach a local cooperative in your place for a cooperative business assistance loan.
What is a co-op? A cooperative, or co-op, is a business owned by the members, controlled by the members, for the benefit of the members. Often, cooperatives are created to improve the access of people to services and to provide members with goods at a reasonable cost. In the Philippines, a co-op could offer one a minimum loan of PhP4, 000 and a maximum of PhP50, 000 with Interest rates from 3.1% to 3.3% per month. Small businesses find co-op their last resort for business loans when loans with banks or finance companies are difficult to secure.
Secure Start-up Funds from Family
Start-up businesses are easier to start and manage in the early stages when there is sufficient fund. So, how do you get that first push? Use family and friend’s dollars or pesos to fund your business venture.
“There is no question that money from friends and family is the lifeblood of entrepreneurial ventures,” wrote Anne Kates Smith in Kiplinger's Personal Finance Magazine. Families and friends could be the best source for a quick cash and easy loan. One, they know a great deal about you, thus they can lend money fast, and no collateral. Second, they know your background and know where to find you, thus they can offer better terms of payment. Loans from your family or donations from friends (or a combination of both) are a good way to get cash to help in the early days of your business.
When it comes to raising money for your business, family and friends could be the best source for that much-needed fund. However, sometimes it has its own risks. Consider a small bank loan if you have a clean credit history. However, most banks only allow you to borrow against the mortgage of your house, which is a risky thingy, unless you are sure that you can pay.
Maybe, take several avenues to fund your business. A fast-secured personal loan could be best — a low cost finance for timely use to get the entrepreneur vehicle off and running.
Lizzie Elzingre - The Malay Temper is the main component of the Filipino Culture. The premier Malay characteristic described as pleasant and obliging is a ...
Join the Conversation