Finding Funds for Your Home Business
Finding the funds to get your home based business started isn’t always easy.The first logical place to start is a bank. It can be a little scary - banks are typically very conservative with their investment dollars.
The best thing you can do is be prepared. Most want to see a business plan and a well-prepared business loan request. Other things they’ll ask for are financial statements, projections for the business and a repayment plan, plus collateral.
Banks also want to see that the business owner is investing in the venture. All of this, on top of a sparkling credit history, makes obtaining a bank loan an unrealistic option for many.
Luckily, the Small Business Association helps pick up some of the slack. They offer two types of loans suitable for home businesses the Microloan and the Basic Loan. For both, lenders can apply for up to $35,000. The Basic Loan offers more flexibility, allowing lenders to use the funds to pay off debts and acquire property as well as acquire capital and purchase supplies.
There are other options, too.
Some banks, governmental organizations and business groups offer microloans based on character and management ability rather than credit history. As an added bonus, these loans can sometimes serve as a springboard toward larger loans because they help establish your company’s creditworthiness.
Grants may also be an option or your business franchise. There are lots out there and chances are there’s one just right for your business. Keep in mind that grant requirements are strenuous and there’s a bevy of competition.
If loans via the traditional routes aren’t working, don’t discount your friends and family – or your customers. Chances are there are people who believe in you and the home business you’re trying to create. Draft a proposal and make your pitch – remember: every ‘no’ brings you one step closer to a ‘yes’!