You have a plan for an at-home business that’s going to knock people’s socks off. It will be profitable and will help you get away from the 9-5 grind. The only thing is you don’t exactly have the money to get the business off the ground. That doesn’t mean that you have to give up on your dreams. There are a number of ways that you can get creative to fund your new home business. Here are a few to get you started.
Use Your Assets
Although you may think that you don’t have money to fund your new business, you may have assets that you’ve forgotten about. For example, do you have a savings account or a home equity line of credit that you can pull from to finance your business? If you’ll be working from home and have a two-car household, you may be able to sell one of your cars to get some startup cash. You can also borrow from your 401k or IRA. Money borrowed from your 401k must be paid back with interest in five years. Be wise about using your own assets and avoid depleting your savings completely.
Ask Friends and Family
Before approaching a bank with strict requirements, consider asking trusted friends or family members for small loans. To protect all parties, have a contract drawn up. You’ll also want the lenders to understand that it is a loan rather than an equity investment in the company. You likely will not have to pay an interest rate, and if you do, the rate will be much lower than rates offered by the bank.
Small Personal Loans
Although you sometimes have to jump through many hoops to get a business loan, getting small personal loans from a bank or reputable lender is often easier. When you get a personal loan, you can use the money for whatever you’d like, including starting up your business. Choose the lender with the best interest rates and repayment terms to make those first few months easier.
Crowdfunding is an excellent way to find funding for new, creative businesses. It is a form of charity where people on crowdfunding sites pool together to fund a venture or project. Conditions aren’t as rigorous as applying for a loan, but those who invest in your venture will expect regular updates. The best part is that you don’t have to repay the money invested, nor do the investors have a stake in your business.
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Now you have four easy, creative ways to get money for your new home business. What’s holding you back? Get out there and pitch your potential lenders and investors today!