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Of Business and Resources
Most people always dream of starting their own business. For some, it is a way towards financial freedom. For others, it is the desire to be one’s own boss---to do whatever one wants to do and have total control over his own business. Starting or managing your own business can be pretty easy if you have a clear vision of what you want and the determination to succeed. However, one major problem that most people encounter when starting their own business is the lack of funds needed to set it up. /p> Although personal savings is the most common source of funds, there are several funding sources out there that you can tap to help you get the money you need to start your own business. BELOW ARE JUST SOME OF THE POSSIBLE SOURCES OF FUNDS THAT YOU CAN TRY FOR YOUR BUSINESS:
Before heading off to the bank to get a loan, consider asking your friends and relatives for help first. Maybe you have an aunt or uncle who is willing to loan you the money, or a friend who is interested in investing in your business. The terms of payment won’t be that difficult since they already know you well. Be sure to prepare a formal agreement when acquiring a loan from a relative or friend, or when they want to invest in your business. This should help you avoid any misunderstandings that may arise in the future and will take the relationship into a more professional level.
Banks are one of the primary sources when it comes to acquiring business loans. Commercial banks are the best place to apply for one because they have more experience and interest in business loans. It is advisable to approach a bank where you already have a savings or checking account. Talk to a commercial loan officer and be sure to show him your proposed business plan.
A credit union is a financial organization or a cooperative built by the employees of a company or by the members of a labor union. Perhaps you may want to start your own business while still employed in a large company. You can go to your company’s human resources department and ask the person in charge if the company has a credit union. You can also ask him if you are eligible to join a credit union. This would be a perfect opportunity for you to borrow the capital needed for your business. When your business becomes profitable, you may well be ready to devote all your time and energy to your business instead of staying as an employee.
Insurance companies are known for offering term loans and mortgage loans. They can provide you with the money you need as long as you have sufficient assets to cover the debt. Their terms and interests are the same as that of commercial banks. Insurance companies are a good source of funds, especially if you need a large capital, because they usually have high loan limits.
The government also has several programs that offer financial support to small and medium enterprises. Contact the Department of Trade and Industry and ask for information about their lending programs. Learn which program you think will be right for your business.
An angel group is a group of private investors who form organizations to invest in new businesses. They pool their resources together to come up with the amount that you need to finance your business. However, these angels usually want a share of your business. That means you have to give up a portion of your business in exchange for funds. The best way to attract these groups is to place an ad in the Money Wanted section of a newspaper. You can also contact a broker or a lawyer to find these groups. When approaching these funding sources, always have your proposed business plan ready. This should include your marketing research, projected costs and anticipated income figures in a period of at least three years. Never give up if a bank or an insurance company turns you down. Always remember that perseverance is the key to achieving your goals. There will always be a way to raise money for your business. |
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Friends and Relatives