Small businesses are the hardest to take off but with proper planning and good strategies, these small businesses can be turned into multinational corporations in a very short time!
One of the most difficult things about starting a small business is having access to resources. All resources, be it the finances or the capital assets, are limited and difficult to get hands on. To help all you new entrepreneurs, we have compiled the 5 easiest ways to obtain finances to kick start your small business!
If you are a new business and your expenses are not that much, then credit cards are the best way to obtain finance. You can charge your card for all the expenses that you need to incur and make the minimum payment when due. The advantage of obtaining finances this way is that it is readily available. You do not have to look for lenders or give guarantees. All you have to worry about is the small amount of minimum payment that you can easily make as soon as your business gets going.
Obtaining a loan against your home equity is yet another easy way of obtaining finance. You can take out a loan against the amount that equals the value of your home minus the liabilities. Again, the method is readily available, has low interest rates and flexible clauses. These home equity loans are quite easy to obtain as compared to traditional business loans.
There might be some capital assets at home that you can probably live without. For example, you may have an extra car or even only one car that you rarely use. You can sell such assets for a generous amount of money and can buy them back (and better), once you start hitting profits in your newly started business. This method of financing is liability free. You do not owe anyone anything, there are no interest payments to worry about and you can easily buy back the asset later on.
Angel investors are wealthy people with a high-risk loan profile. This means that these affluent people are ready to invest in risky ventures and therefore, easily lend money to new entrepreneurs. Angel investors expect a 20 to 25% return rate when the business hits off and are usually very smart individuals, who not only have the knowledge of the sectors they invest in but are also good businessmen. This means that apart from obtaining finances from them, you can receive free advice on business problems and get access to their valuable contacts too.
This is quite a risky method but if you are confident about your business, this method of obtaining finance is probably the most advantageous one. It requires you to have thorough knowledge of how you expect your sales to be and necessitates intensive marketing. With tactics like online marketing and rigorous salesmanship, you can easily coordinate with suppliers and customers so that your sales money can be used to pay off your inventory investments!
All of the financing methods have their own advantages and risks. With a good CPA, like a SK Financial accountant, by your side, you can easily obtain finances and hit profits in no time at all!