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The Best Places to Find Startup Money for Your Business
This is a guest post from Vishal P. Rao,
Starting up a business is not always cheap, and sometimes the costs of starting a business is what keeps many potential small businesses owners from taking the giant leap. You shouldn't allow this worry to keep you from realizing your dream because there are several ways that you can actually find start up money for your business. Here are some of the best ones that most small/home business owners will use.
Friends and Family
This is the best resource for any money you may need for your business. Friends and family are the most forgiving of loans as well and the most likely to believe in your business idea.
Don't just go to your friends and family and ask them for money. You need to show them that you have done the work on your business plan, so that you can prove to them you know what you are talking about and that you are ready for the challenge of a home business. Give them a business plan and treat them as if they are investors, not friends or family.
It should be noted that if you are borrowing from friends, ensure you pay them back as soon as you can. Nothing can ruin a friendship like borrowing money that is never paid back. They are investors and they believed in you, so reward that loyalty by paying back your loans as quickly as you can.
Banks may not be very popular right now, but they do help out a lot of home businesses by providing home business loans. Loans can range from a few thousand dollars to even $100,000 or more. They obviously have tighter rules for lending than your friends and family do, but they can lend you a lot more money as well.
As long as your credit rating is good and as long as you have a history of paying your bills, you should have no problem getting a loan with a reasonable interest rate and payment terms. Just like friends and family though, make sure you pay this back or you could completely ruin your credit. Also, don't apply for a huge loan unless you need it. You have to make money to pay back that loan, so the smaller the loan the better.
Small Business Administration
In an effort to help people make their small businesses successful, the United States government created the Small Business Administration, whose primary goal is to provide grants and loans to entrepreneurs to make their businesses successful. They offer a wide range of loans, from $500 to $500,000 and more. They have very favorable terms and for the Microloan program, less than good credit actually okay for the loan or grant.
This is an excellent resource if you are in need of cash for your small business but don't have the money for it. If you get a grant, you don't have to pay it back and you can put the entire sum of money straight into your business to make it successful very early on. Many companies that are now leaders in their industry took advantage of this amazing program and have their success to show for it. This should be an option you look at if you want a small business that is successful, and not bogged down in debt.
These are the three best options for your business if you want to bring in some money without having to worry about how much you are going to pay back. Obviously, borrowing from a bank is more risky than getting money from the Small Business Administration, but who you borrow from depends on how much money you are going to need.
About the Author.
Vishal P. Rao provides tips, advice and guidance on starting a home based business on his site at: http://www.home-based-business-opportunities.com/
Tags: Start and Run a Business