You have a great business idea, and you have already done the mind work to write out a solid business plan. You may feel very hopeful, but try not to get too excited yet. You still have to figure out how to finance the whole concept.
It may seem like a daunting task, but finding small business financing is not as scary as you might think. There are a wide array of financing options for entrepreneurs looking to give their great idea the boost into reality. Check out an overview of a few financing possibilities, and get moving!
Do not quit your day job
Too often, ambitious entrepreneurs quit their day jobs to pursue their business plans. It is not a good idea to cut your main income right before you plan to take on a large financial investment. Just because you have built a snazzy web design (like this example), does not mean your work is done.
Ultimately, the financing for your new business will have to be returned. If your business does not make it very far, you will be left with no income to survive. Keep working that conventional job as long as possible.
Open a home equity line of credit
As a more constructive and manageable alternative to high credit card debts, you may want to consider taking out a home equity line of credit. Of course, you need to own your home to consider this option, but it is a viable option for homeowners.
Research the specifics of home equity credit to better understand the parameters of the arrangement before you dive into a contract. As a word of caution, try to avoid using a home equity line as your only business financing option.
Tap into your 401k savings
The funds your hard work up until this point in your life has earned you can be helpful to a new business startup. If you follow the correct steps, you can tap into your 401k without accruing penalties.
Provisions in the nation’s tax codes allow individuals to utilize their professional savings for business purposes, but the process is very complicated. Seek legal council to assure everything is in proper order.
Take out a small business loan
The federal government offers small business loans under certain strict requirement guidelines. Not everyone is able to utilize this particular option, but it is definitely worth researching.
Try building a convincing crowdfunding plea
Crowdfunding is a relatively new way to finance purposeful business ideas. Angel investors peruse entries on sites like Kickstarter.com and GoFundMe.com, and commonly invest small increments in ideas they deem promising. It is a no-risk way to generate interest and finances for an up and coming small business.