Where to Find Money for Your New Business

You want to launch a new business. Maybe you want to own a hair salon, open a manicure-pedicure spa, or start a ladies fitness center in your hometown.

There?s just one problem: launching a new business requires thousands of dollars; probably more money than you can realistically save within the span of a year or two. Where can you get investment money for your small business?

#1: Start With Yourself

You might have more money than you think. Perhaps you don?t have enough money in your savings account to seed your business venture, but do you have other sources of personal worth? Could you take out a home equity loan? Could you get a cash-out refinance loan against your home? Do you have stocks or mutual funds that you could sell?

#2: Borrow From Family, Friends or Colleagues

There are two ways you can structure borrowing money from family or friends. Option #1: you could take a formal loan from them, with a predetermined payment schedule and a fixed interest rate. Option #2: you could sell shares, or sell ownership, of your company in exchange for capital finance and seed funding.

#3: Pick a Partner

Perhaps you have time, but not much money. Other people, however, have the opposite problem: they have money but no time. Partner with someone who can put up the capital, in exchange for you putting up the labor.

#4: Take a Bank Loan

Banks will sometimes grant small business loans or unsecured startup loans. When you go to the bank to discuss the loan, make sure that you bring a copy of your business plan, a copy of your credit score, and a list of your assets and liabilities. The more documentation that you bring to the table, the more the bank will see that you?re a serious professional.

About the author

Kennedi Rose

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