When you are an aspiring businessman and have a good idea for a venture, the only thing coming between you and your dream is the lack of funds. There was a time when starting businesses only took a bright idea and patience to find the right angel investor, but these days entrepreneurs have to go the mile on their own. Recession and the unstable market environment has made investors low risk-takers and frugal about funding new projects. Hence, you can find a lot of entrepreneurs starting out with nothing but a good idea and clear concept of what they want. But, raising finance for a new business doesn’t have to be a big problem. Here are some ways that may work for you –
- In most cases, more than 50% of the capital needed for a new business comes straight from the entrepreneurs’ pockets. There are many creative ways to ensure that an adequate amount is acquired. If you have been an investor in the real estate development sector, you can contemplate selling your investment for a handsome profit. Another option is to acquire a loan against your property. It is a lesser known fact, but you can also get up to 90% of your total insurance cash value as loan through your life insurance policy. Also, such loans have very low rate of interest. Most governments across the world have different loan schemes offered to businessmen. While some of these loans may need you to pay higher interests, there may be a proposal that fits your bill perfectly. You may even use your credit card to finance a fairly small business.
- We rely on our family and friends in times of crisis. These are the people that care enough for your dreams, to help in whatever way possible. Borrowing money from family or friends may be the best way to raise the needed capital. No interest rates, no payment deadlines, no pressure and it might even make the bond between the two parties stronger. If your potential lender is interested in the business, you may even consider making him an investor and see the money as equity investment. Another way is to go through the safe and house for anything valuable. Look for heirlooms given by grandmothers, antique furniture, art pieces, expensive jewelry and the like. This may be the time to put the art and beauty for sale. You can use online portals these days to make quick sales without hassles.
- Have you heard about social lending yet? This is a comparatively new concept on the Internet, where individuals can acquire loans from other individuals through social lending websites. On most social lending sites the borrower has to register his details and put in a request for a particular loan amount. Lenders that are interested, then bid on your request. You can proceed with the money transaction once you find a lender that is offering a reasonable interest rate. While the loans are unsecured the lending websites, which act like the intermediary, do have certain policies and regulations.
- If your business venture allows for trade credit, it may be best to take advantage. Since you are just starting off, convincing suppliers of your integrity will be difficult at first, but it is worth a shot. In fact, there are some smart businessmen that have found a way to convince suppliers of you being good for their credit. All they do is ask the retailers or end buyers for a letter of credit assuring that the product will be bought. This not only gives the supplier peace of mind, but also gives you the business boost you need.
Mary T. Cook is a freelance writer that usually blogs about real estate development in most major cities of the world. Being an avid traveler Mary often posts travelogues and articles describing her experiences and adventures while on travel. She hopes to someday be a published writer.