One of the challenges every single business faces whether it’s new, old, big, small, traditional, cutting-edge, or any myriad of differences, is trying to get funding for your project. Especially when you are a brand new business getting funding is really difficult.
Traditional Funding Option – Bank: The place that most home businesses start is the bank. Usually you’ll talk to a branch manager, or business specialist and ask for a start up loan. What the bank is going to want to see is collateral, business associates, and your business plan. The Better Business Bureau, has some helpful hints for developing your business plan, and to get funding from a banking institution your really going to have to know the ins and outs of not only your business but the accounting side, the tax side, insurance, etc. They are going to want to know to the penny how much it is going to cost to run your business, how you are going to get your income, and how they are going to get their money back. The bank does not want to take a risk, it wants a sure thing.
Traditional Funding Option – Family: The next place that people reluctantly look is to family. The best thing about going with a family loan is that the interest rates are low if not absent altogether. The problem with a family loan is that if you miss a payment, or are having any kind of financial strife it can grossly strain your relationship, and as the famous quote goes “you never want to mix family with business”. You also leave open your business for ridicule if you are getting money from a family member.
Modern Funding Option – Leasing: Besides banks one of the largest lenders to businesses are leasing companies. Lending companies such as National Commercial Capital, or National Equipment leasing, have various plans that are setup to help purchase equipment or software for businesses. The terms are negotiable as are the rates, but if your are a start up don’t expect to get anything near what you would get on a home loan, think high rate credit card instead. The leasing companies may also require you to sign a personal guaranty that will use your personal credit and personal collateral should you default. If your purchasing a POS System check out the financing page to see what leasing options the Point of Sale provider is used to using. For example POSGuys.com uses https://posguys.com/financeinfo.asp for their leasing and they also have an on page monthly payment caculator.
Modern Funding Option – Merchant Account: One of the things that merchant account providers are doing now is tacking on the cost of doing business into the monthly fees until that initial loan is paid off. If you are an existing business with months of merchant account statements then a merchant service provider may be willing to lend you money based upon how much you are processing. The terms for this can be very flexible as they have a good sense on how your business is doing.
Cutting Edge Funding Option – Kick Starter: If you have a great unique idea, one that you know the public is going to love then why not take a chance on kickstarter, post your great idea up and if the public agrees with you then you can get some funds to get going. One thing to note is that it is all project base, you can’t just go on and say give me money because I’m cool, you have to have an idea, but part of getting that idea off the ground is getting a computer and point of sale system.