Wed 6 Feb 2008
So, you have a great idea and you want to convert that idea into a successful business. You may have the idea, the motivation and even the expertise to pull it off. But where is the money?
This single important factor can stop your dream from becoming a reality. Here are some ways that you can raise the money to get your business off the ground.
This could be the first place to get some money. However, banks require collateral; and in the midst of the current sub-prime mortgage crisis, banks are very jittery about offering loans to startup businesses without adequate collateral.
You could contact the SBA (i.e. the Small Business Association) to solve your collateral problem. Be forewarned: the documentation required will be intense.
Venture Capitalists (or Angel Investors):
These are people who can finance your business if they see future potential in it. They become co-owners of your business and they also take a certain percentage of your business' profits to recoup their investment.
In the worst-case scenario, they could also take over your business. But the documentation required to secure the money is minimal.
Family and friends:
You can approach your family or friends for a "loan." This way, you will not require collateral or a guarantor and you can offer them a rate of interest that works for you.
However, you should take care to pay off the loan on time - or you could become a social outcast. Again, hardly any documentation is needed.
Raising money for a new business venture is sometimes difficult, but the end result is almost always worth it!