Millions of potential entrepreneurs are hesitant to start their business because of money issues. They simply do not have the financial resources to start their business venture. Certainly, every business requires funding. Often, the new entrepreneur focuses on the traditional ways to fund their business. For example, bank loans, SBA loans, or using a credit card. Often, it helps to think outside of the box and consider other options. Certainly, those opportunities are packaged with advantages and disadvantages. Take all this into consideration before moving forward.
Consider Crowd Funding
Recently, news surfaced about an entrepreneur that funded his invention by going online and reaching out to the Internet audience via a site like Gofundme and Kickstarter. The fund-raising sites allow the entrepreneur to plead their case to a worldwide audience. The people investing in the funding project are also potential first customers that will spread the word about the entrepreneurs product or service.
The idea is to personally invest in your own future by using your own line of credit. That line of credit is funded by your credit card. You are able to borrow funds up to your credit card limit. Essentially you are borrowing money to start your own business. This is a risky venture, but might potentially reap great rewards in the future. It’s important to remember that you’ll probably borrowing against a high interest rate and paying late might affect your personal and business credit rating.
The fact is that most banks are very hesitant to loan money to a new startup because they do not have a proven record or credit history to measure potential success. However, it might be a good idea to consider getting a personal loan to start your business. Of course, this is only advisable for those with a good credit score and credit history. Generally, one would require at least a 650 credit score to even apply for a personal loan.
An SBA loan is out of the question for the majority of new business owners. However, those with a good credit score might as well give it a shot. If you meet the SBA loan requirements you are good to go. The advantages include a low interest rate and better terms than a traditional bank loan.
Are you a member of a credit union? Hit them up for funds to start your business venture. Credit unions are nonprofits that offer more flexible terms. In addition, credit unions offer members lower fees and lower interest rates.