Financing a Small Business

Are you tired of working for someone else? Has there been an idea for a business that you have had for years? Maybe now is the time to bring that idea into reality. Starting your own business that is a success is far from being a sure thing. In fact most businesses will fail within a few years of starting out. There are three major ways that most small businesses fail and they include poor planning, not having enough experience in how a business is run, and not enough funding. In fact, getting enough funds for small business to allow you to start your business correctly and keep it running through the initial inevitable lean times, is a major reason why new businesses do not succeed.

In order to have a successful business, do your homework and take it slow. The more time you take in researching your small business and moving ahead prudently will increase your odds of success. You can learn from people who have been successful, so don’t be afraid to ask questions and look for a mentor. In your search for funds for small business, we here at PaydayLoansCashAdvance have gathered a few ideas to help.

Your Assets

You probably have more assets than you realize. If you have any valuables such as jewelry, antiques, or maybe a recreational vehicle that is collecting dust, you have assets that can help in the area of financing a small business. Selling these items could provide the financial seed you need for success. You might also look to your savings account, or even a 401k. There may be tax penalties associated with tapping into your retirement however, so be sure to check with an accountant. Some life insurance policies may have a loan value you could utilize. Be sure you look at everything you own, and see how or if, they may be turned into cash to help you start your business.


You may also check into getting investors who would be willing to give you money for some of the start-up costs. The money that they lend you would be considered equity investments. For this, you would likely be giving away part of your company as well as some control. The more money that is asked from investors, the larger share of the company the investors would want. Investors who do not know you may be difficult to find, so if you have a good idea, are a hard worker, and have done your homework, you may be able to find friends or family willing to invest in you and your idea.

Unsecured Loans

In small business finances, there are secured and unsecured loans. A loan that is unsecured is one that the lender offers without requiring collateral. It is sometimes referred to as a signature loan. It is not secured by property and the lender is counting on the good name and credit history of the borrower. Credit cards are a type of unsecured loan. If you have a good credit rating you may inquire to a lender for an unsecured loan. Loans that are unsecured, like credit cards, tend to have higher interest rates.

Secured Business Loans

Banks could also be a source for your small business finances. Banks offer secured business loans in which they will ask for assets, such as your house for collateral, just in case you don’t make the payments. Banks want security in knowing that when they help with the financing small business loan it will be paid back and secure loans give them this guarantee. You might want to check into the other options first before going to a bank. To get a bank for financing small business loan, you would need to have tax returns from the business, if it is a going concern, or certainly your own personal tax return if you are just starting out. You should also prepare financial statements and make sure that the business plan is a very solid one. This would include having your anticipated business’ projected income, expenditures, and as many details of a budget that you can gather.

The bank will look favorably on those who have a solid plan and can present a very clear picture of what the business can do. If you appear disorganized, do not have the required information in detail, or seem unsure, it will not look favorably to the bank.

Remember that no matter what choice you make in small business finances, you will have to repay the amount you owe. You will need to include this amount in any monthly budget for the business. Also, if you are borrowing from friends or relatives, they deserve to have their loan written out as to the amount you have borrowed, how much interest you will pay, and how and by when the loan will be repaid. Borrowing from friends or family can lead to problems, so having these details spelled out for all parties will make sure that there are no misunderstandings. We at hope this information helps you in your search for small business finances.

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