For most entrepreneurs, financing tends to be one of the biggest challenges when launching a new business. Even if you expect your start-up and monthly operating expenses to be minimal, it may still be challenging to find the money you need. If a traditional business loan isn’t an option, you might want to consider simpler financing options that you can create on your own.
Take a look at your assets. If you own things, you can sell them. Jewelry, rugs, furniture, time-shares or second properties are just a few examples.
What about your car? If you drive a nice, late-model car, you can sell it and lease a less expensive one without a down payment.
Borrow against your home. If you have established equity in your home, it should be very easy to borrow against it. Keep in mind though that once the loan begins, you’ll have monthly payments. Or, you may want to consider refinancing your mortgage with a new one.
Friends and family. Friends and family may be willing to support your business start-up. If you do chose this option for financing, be sure to put your agreement in writing so that it’s official and there aren’t any miscommunications that can cause a problem down the road.
Borrow Against Your Investments. If you plan to continue working full-time while you start your business, consider borrowing against your 401(k) or other retirement plan.
Consider a low interest credit card. Credit cards are a quick and easy method of funding your start-up and can help build business credit at the same time. You can start with deferred payments or a minimum monthly payment until your business starts to generate income.
Regardless of the financing option you chose, be responsible and keep your financial security at the forefront of your mind. If you’re determined to succeed at your new venture, investing in yourself is the way to go!
ABOUT THE AUTHOR
Debra Cohen is President of Home Remedies of NY, Inc. and founder of the Homeowner Referral Network (HRN) business. Her HRN business has been rated “The No. 1 business Start-Up” by Small Business Opportunities magazine and has been featured in numerous media including Working Mother, Entrepreneur, Remodeling, Good Housekeeping and CBS News. Currently there are more than 300 independently owned HRNs operating nationwide.
For additional information, visit her website at www.hrnbiz.com.