If you’re an entrepreneur looking to get some financing for your brilliant new idea for a business, I’ve got some good news and some bad news for you. Since you can’t tell me which you would like to hear first, I’ll start with the bad: finding small business start up loans from governments can be an extremely difficult and competitive process. That’s not to say it can’t be done – thousands of entrepreneurs get them each and every years. It’s just not an easy thing to get.
The good news, however, is that governments aren’t the only place you can look to get the money you need to get your business off the ground. There are a number of other options, which I’m going to outline for you here.
The first option, which you will have probably already considered and not liked, is finding the financing from within your own pockets. I don’t just mean checking your bank account; I mean going deep. Do you have any property you can sell? Have you re-mortgaged your house? Not only is this a good and easy way to get some venture capital, but it will also help you get loans down the road from other institutions. After all, lenders want to know that the person they’re investing in also has a personal stake in the business.
If your own pockets are empty, have you tried checking with your friends and family? Although you might not like the idea of relying on mom and dad again, friends and family are one of the most popular sources of small business start up loans for many entrepreneurs. After all, you will likely have to do little selling or convincing. They already believe in you and will want to support you in your ventures. Just make sure that you’re clear about the repayment scheme – if there is one – so that business doesn’t get in the way of personal relationships.
After personal acquaintances, the first institution you can turn to is your bank. These days, big banks have more of an interest in helping out small businesses than they ever used to. But make sure you don’t just walk in there with your resume and a proposal and expect them to fork over their money to you. Banks will want to see that you’ve put a lot of time and effort into your presentation. That doesn’t only mean making sure you look good. Although a business suit is definitely in order, it also means making sure your business plan is thorough and complete.
Then, of course, there are the government sponsored programs. Whether it’s a government-sponsored organization, such as the Canadian Youth Business Foundation, or the government program itself, these can be difficult to be successful with but might be worth your time trying to find out.
Finally, there are investors. Angel investors, venture capitalists, or private lenders can all be great sources of small business start up loans, if they like your business that is.
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