Top 10 Right and Wrong Business Funding Methods

[Nicholas Brown]

Top 10 Right and Wrong Business Funding Methods and Little Pointers that will Increase Your Business Profits

 

“You cannot make money without money.”

 

The passage above indicates the importance of business funding. Whether you are on the process of building a startup from the ground up, or working on sustaining a current enterprise, you need additional money to start and stay afloat.

 

Top 10 Advisable Funding Methods

 

Not all business funding methods are recommended. However, the following list suggests some of the best sources. If you need extra cash for the business, try going to one of the few suggestions below.

 

1. Your Own Personal Savings Account
2. Family and Close Friends
3. Private Loans
4. Commercial Lending
5. Community Development Financial Institutions (CDFIs)
6. Small Business Administration (SBA) Loans
7. Micro Loans
8. Venture Capitals
9. Angel Investors
10. Business Plan Competitions

 

Top 10 Risky Funding Methods

 

Whether your business is in dire need of cash, it is best to stay away from the following sources. These funding methods are very risky and may result to substantial losses for the business if you fail to pay them quickly.

 

1. House Title Loan
2. Car Title Loan
3. Retirement Account 401(K)
4. Personal Loans / Unsecured Debt
5. Payday Loans
6. Pawnshops
7. Credit Card Cash Advances
8. Loan Sharks
9. Overdraft Loans
10. Tax Refund Loans

 

Business Plan

 

This is especially important for new businesses. When presenting to private investors, bank lenders, and other institutional funding sources, the business plan is needed to evaluate ideas and methods. As for current enterprises, it is helpful to provide an honest account of financial performance to prospective creditors.

 

Face to Face Meet Up

 

There are many loans that can be applied for online. Give this a chance, but do not ignore the importance of personal interaction. This can spell the difference between an acceptance and a rejection notice.

 

Look at the Terms Carefully

 

It is tempting to succumb to an attractive offer that seems reasonable to the senses. However, be sure you read the contract first and understand the terms. This will save you from a lot of stress in the future, especially during times when cash is scarce. Terms such as the interest rate, payment dates, and penalties for late payments will come in handy.

 

Invest in Your Own

 

Funding sources can reject your loan application if they see very little investment in your part. To solve this, you must show that you can put more than time and effort to your enterprise. Put in cash, investment assets, and extra properties to beef up your business balance sheet.

 

Indicate a Return on Investment

 

This is a sure way to get the attention of several private investors. Just be sure that your business can actually live up to the promise of return once the funding has been accepted.

 

Conclusion

 

With all the business funding methods available, it is your job to filter out which ones need to be avoided. Exercising prudence may not only save your business and personal assets, it can also save eliminate stress and extend your sanity as a small business owner.

Thank you for your consideration,

Nicholas Brown
Phone number: 214-702-3478
Email: [e-mail]
Website: http://sfgbusinessfunding.com