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Starting and maintaining a small business is a challenge that requires the confluence of many elements:
An idea, a plan, the right people and tools and– perhaps most essential– the capital to accomplish it all!
It is this last factor that can be extremely daunting to budding entrepreneurs.
Take some time to investigate some of the following options, and you just might find that success is not as unreachable as it may at first seem.
Perhaps the most traditional of your options, bank loans have some advantages.
They can cover short- or long-term needs and will help you to pay for whatever you require without restrictions.
However, you usually need to provide assurance of repayment by furnishing them with a personal guarantee such as a mortgage.
With banks, you can pay off the loan early if you have a sudden cash windfall, which could save you on interest fees.
The Small Business Administration (SBA) offers incentives to banks and other lenders that encourage them to provide small business loans to get businesses started and to help them with ongoing needs.
Regardless of what lending institution you decide upon, be prepared to furnish a significant amount of documentation with these types of loans.
In the end, they are often worth the trouble, since their interest rates are generally more manageable.
If you are a real estate developer, this money-making vehicle might work very well for you.
It depends on what state you live in, but you might get anywhere from 20 to 30 percent of the total cost of the project.
Furthermore, you might even be allowed to borrow against the subsidized value.
If the terms for these loans in your area are not as favorable as you would like, consider your neighboring states.
Contemplate making a business-favoring move if your options are significantly better.
Although the thought of borrowing from your in-laws or other friends and relatives might make you squeamish, at least weigh the pros and cons.
If you can find someone in your circle who is willing to take a risk on your company at terms you are genuinely happy with, both of you might benefit in the long run.
Of course, the IRS does not offer loans, but that doesn’t mean you can’t get money legally via your tax returns.
Deduct any and all expenses you can. A
s a business owner, investing in a good accountant could be one of the best financial decisions you ever make.
Use part of your profits to grow your business instead of having them eaten up in taxes.
Whether you borrow from your Aunt Tilly, secure bank, or small business loans, the need for short-term and long-term cash is a given.
Once your business begins to make a profit, don’t overlook the importance of putting some of those funds aside as a cushion for the next rainy day that is sure to come.
Being flexible and remaining prepared for any eventuality are two of the most enduring qualities of a successful entrepreneur.
Make striving for them a part of your goals and you will have a far greater chance of achieving your business dreams.