If you have an idea for a new business but only lack the finances to make it happen, you probably stay awake at night wondering how you can get the cash to get your idea off the ground. Here are ideas to boost your business plan and raise money for your startup going forward.
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Venture Capital
If your business has incredibly high growth potential, you may want to approach a venture capital firm. These firms invest in businesses that display the ability to grow very quickly and very strong. If the business is more of a traditional one with positive but more modest growth potential, you will want to look elsewhere.
Bank Loan
If you are taking out a loan from a traditional bank for your business startup, they may require that the loan be guaranteed through the SBA. Don’t worry, though, as this is typically just a formality. If your credit is at least average and you have a strong business plan that you can present, not to mention collateral to back up, you can likely secure financing in order to start your company.
Life Settlement
You may have money that is accessible that you didn’t even know about. Your life insurance policy is one of those things to look at, as there are investors who buy out life insurance through a process called life settlements. The investor will purchase your policy at a rate that is above the typical cash-out amount but that is less than the full value of the premium. All rights and responsibilities transfer to the purchaser. This relieves you of having to pay the premiums while trying to start a business as well as putting some easy money into your pocket with which to supplement your income in the long run.
Second Mortgage
If you have a home and a good working relationship with your bank, you may want to consider taking a second mortgage on your home. While the bank may only offer around 70-80% of your home’s equity, you benefit by paying much lower interest rates than are typically offered by other forms of financing.
Take on a Business Partner
If you have limited access but are looking to cover the gap, you may want to consider looking for a business partner. This could be someone you know or simply someone who is in the habit of investing in lucrative businesses. If at all possible, look for a partner who is more interested in becoming a silent partner. This means that they put up money but have very little, if any, say in how the company is run. This arrangement leaves you in charge while still being able to access much-needed funds.
Credit Cards
While this is certainly the least recommended of all borrowing options due to the potential of growing debt, but it is also the easiest to use. Just make sure that you consider interest rates when you are borrowing and that you repay the funds back as quickly as possible. Failing to do so can have severe consequences on your credit profile. This option is essentially considered a last-ditch effort.
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