Deciding to start your own business can be as exciting as it can be expensive. Many folks who decide to start a business often don't have enough of the money they will need to get their dream off the ground. For those entrepreneurs who think that they may need some financial assistance before opening the doors, consider one of the following financial assistance programs:
1. Friends and Loved Ones: Many people may seem hesitant to loan money to family or friends, but steps can be taken to ease the worry. Don't try to wrap up the people you hold dear in a pyramid or other get rich quick scheme. Friends and family will have more faith in you if you present them with a business plan, research, and some type of payment agreement. You will also find that you will gain more support if you plan on starting a business in an industry that you have experience in.
2. Home Equity Lines of Credit: Taking out a loan against the appraised value of your home is a great way to earn quick capital from a financial institution that you have a history with. The amount of this kind of loan will vary based on the value of the home and the amount owed on the original mortgage.
3. Venture Capitalists: These professional investors gather capital from various sources and help out new and/or high risk businesses trying to get themselves off of the ground. These investors make money by becoming a partner in the business and selling off their stake in the company a few years later. Venture capitalists are difficult to attract because they receive so many requests for money each year.
4. SBA Backed Loans: The Small Business Administration is a federal office that guarantees loans for small business loans. Banks prefer these loans because the federal government agrees to cover the cost of the loan should the business owner fall into default.
5. Angel Investors: Angel investors are similar to venture capitalists in that they invest in new start ups but they are different in the fact that angel investors generally take on more responsibility by offering guidance, advice, direction, and counseling to the business owners they are investing in. Angel investors also become part owner in the company they are investing in order to gain a return on their investment. Angel investors tend to be business professionals who invest in companies as a side job or hobby so they will generally have more of a hand in the day to day operations of a business than a venture capitalist.
No matter where you decide to turn to in order to find capital to start your business, keep in mind that few people like to throw money into the unknown. Before you ask any person to part with their hard earned cash and invest in your dream, prepare for them a business plan and show them that you know what you are talking about. Show potential investors that you will not squander away their money by doing your homework, studying the market, and coming up with a plan for success.
Sally Fontaine wrote this article for Ratelines.com. Ratelines has been a valuable resources of investment information for nearly 6 years. For recommendations on great cd rates or affordable insurance rates , please visit our site.