Alternatives To Small Business Funding
There are many alternative small business funding methods one can turn to when starting a profit-making operation. If one is not fortunate enough to have secured a credit line or a small loan from a large financial institution, the odds are likely not to be in their favor. Below are some financing tips and ideas an entrepreneur may need.
Getting a part time job is one of the ways one can help them finance their ventures. One should then save the earnings obtained from this job and put the income toward the start-up capital for his operation. This method will help one avoid having to go out and look for a loan from a bank or family and friends.
Community development financial institutions are a good place one can look to acquire the initial funds needed. There are nearly one thousand registered organizations of this sort in the country. These organizations can give one access to more capital than those few micro-loans most people prefer to use.
However the above mentioned groups require that ones institution has been operational for a period not less than one year. With the applicants who have been operating for periods of three to five years being the most successful. One should also keep in mind that these methods require rigorous documentation. Many others have regional focuses.
Former employers can also be a great source of funding. If the employer-employee relationship was left intact and in good condition from the previous job can prove to be a good advantage. The previous employer can outsource excess work from the larger corporations to the small scale owner thus becoming the small companies initial work.
Focusing on local banking helps the few community banks when analyzing credit worthiness avoid the cookie cutter approach. Community banks and regional lenders is also a perfect way minor scale owners can get their hands on sufficient capital. If ones operation is creditworthy this may the best method to use.
Another creative technique at many peoples disposal is seeking out a silent partner. This is anyone who puts in money into your corporation for the purpose of possibly attaining future profits but does not voice any opinions to the day to day decision making. This person could be a colleague, a rich relative or anyone one can persuade to invest.
However careful consideration should be given when looking for a silent partner to invest in your venture. The best thing is to take a small portion from someone who has a lot. This is due to the fact that this type will tend to worry less about the probable ups and downs of a new profit-making operation.
Small business funding is always a difficult task for most individuals. Unless one has clean personal credit, it will not be easy getting a company credit card. Bootstrapping will also prove problematic for a person who does not have a big savings account. Through out the ages businesses have been plagued with the financing problem, but the people who have succeeded found a way around it.