As an aspiring entrepreneur or business owner planning to bring your next idea to life, you are either weighing your possible financing options or will do it in the nearest future. Unless you have thousands of dollars in spare funds just laying around in your bank account, the most likely course of action in your case would be to find money elsewhere.
Surprisingly, banks aren’t the first place where most entrepreneurs go to fund their start up companies. According to market research, the two most popular sources of business funding are funds borrowed from relatives and credit card loans, especially when a small number of people are concerned. The former option is especially attractive because of trust and typically flexible loan terms
Credit cards may also seem like an easy way to obtain the extra money you need to start your small business, but it comes at a price. Before taking the plunge, you need to explore all the options, terms and possible outcomes of your decision. You must be aware that even though many banks can market their financing as business credit, it will have almost no difference from a personal loan when you operate as a sole proprietorship. As a result, your own credit rating will be on the line if you do not make your payments on time.
If you would prefer to acquire business funding from one of the local community banks or small business lender, there will be other requirements that you will have to meet. These institutions will want some guarantees, such as taking a look at your future operations in the form of a detailed business plan. If you become one of the start up companies chosen to receive the funding, you will enjoy better terms than those offered by regular business credit.
Surprisingly, banks aren’t the first place where most entrepreneurs go to fund their start up companies. According to market research, the two most popular sources of business funding are funds borrowed from relatives and credit card loans, especially when a small number of people are concerned. The former option is especially attractive because of trust and typically flexible loan terms
Credit cards may also seem like an easy way to obtain the extra money you need to start your small business, but it comes at a price. Before taking the plunge, you need to explore all the options, terms and possible outcomes of your decision. You must be aware that even though many banks can market their financing as business credit, it will have almost no difference from a personal loan when you operate as a sole proprietorship. As a result, your own credit rating will be on the line if you do not make your payments on time.
If you would prefer to acquire business funding from one of the local community banks or small business lender, there will be other requirements that you will have to meet. These institutions will want some guarantees, such as taking a look at your future operations in the form of a detailed business plan. If you become one of the start up companies chosen to receive the funding, you will enjoy better terms than those offered by regular business credit.