Finding money to start a small business takes a lot of work. To start with you will need a good business plan and several leads for small business loans and grants. There are a number of available programs to assist startups, micro businesses, and underserved or disadvantaged groups.
Start your capital search with a good business plan that shows investors and lenders your company’s potential. Follow that up with a thorough knowledge of the resources available and a determination to make your business a reality, and you should be on your way to uncovering a source that fits your new business’s cash needs.
There are several sources to consider when looking for financing. Don’t make the mistake of thinking that the only place you can find the money you need is through the bank or finance company. Explore all of your options before making a decision.
The first place to look for financing is right at home and personal savings and assets are the easiest source of capital. If you have money set aside, you use it instead of borrowing or rounding up investors.
Next, turn to members of your family or close friends who have faith in you and want to see you succeed. Borrowing from a friend or relative is generally the most readily available source, especially when the capital requirement is smaller. Relatives and people you know need fewer assurances and are more open to your ideas than professional investors.
Angels are private investors interested in making more on their capital than they can make through traditional markets such as mutual funds or publicly traded stocks. These “angels” can be your accountant, attorney, doctors or other individuals who seek out new businesses to invest in return for equity ownership. Usually providing additional capital in the range of $25,000 to $500,000, expect angel investors to demand high returns for their investments.
Either way, there are risks and gains; what you take will depend on your tolerance for risk and your personal objectives. Van Nuys Offices