Need To Finance Your Business? Here's What You Can Do

Regardless of you being in a situation where you are considering finding investors for your new startup business, or you are thinking about financing your growing company on your own, as an entrepreneur, you know that the task is not easy.

There are many ways in which one can achieve that goal, and here, we will go through some of them, and hopefully, you will find at least one helpful. 

There Is No One Like Family

This is the most common one and maybe the easiest to go through can be considered at the same time a "coin with two sides". By contacting your family and friends you can, depending on your approach, obtain the money you need or ruin the relationship with them. So the best way to start is to have an already well-made business plan and presentation that may appease them. Try avoiding asking for a loan if you do not have one.

Approach slowly and supply them with a formal financial project. Give them a reason to believe that your loved ones will see their investment back and that it will not just be blown away in a failed attempt that was unrealistic to be. By giving them evidence that all will be well and that they will receive back their finances, you can enlarge the actual opportunity of even receiving it and will bring them at ease. 

What I am trying to say is, they need to take you seriously. Be honest and explain that there are certain risks, but at the same time be confident in your existing business plan. That way you will earn their trust and possibly be closer to your goal. 

We Are Living In A Material World

This is a valid way of using a loan or a lease to buy or maybe borrow a hard asset for your company. Any type of asset can be purchased or lent this way, from a vehicle to a restaurant. Equipment financing has an enormous variety that can cater to specific types of equipment and businesses. But broadly speaking, the most important thing to know and understand is that it is used for financing a physical property. 

It tends to be lower-risk and more cost-effective than let us say a working capital loan where purchasing can serve as collateral damage because then a lender could repossess the asset at any time. 

Should I Start Small?

There is no need to worry. In case you do not have a credit history or are unable to secure a loan through the bank, does not necessarily mean that your dream is dead. There are microloans and you can always apply for one. They are business loans primarily and can range between 500 to 35,000 dollars. 

Banks do not lend these kinds of money since the sum is insignificant. To have one, you need to turn to microlenders. They are a part of non-profit organizations that function differently than banks. A bonus is that the paperwork is not as complex as the one in banks and often are more flexible with their underwriting criteria. Also, their interest rates can be smaller than the ones in banks.

Whatever the business you have, it needs certain management and has its financing. It is up to you to decide at the end of the day, what is best for it. Whatever you do, make sure to know exactly what you are getting and make an educated and informed decision, and hopefully, your risks may pay off.