| Once you have identified the ‘big ticket’ | | | | you’ve been planning for your home business all |
| business idea that is going to work for you, it starts | | | | along and have set some money aside, use that to |
| raining fire to get appropriate financing for your project. | | | | kick start your venture. An ex-colleague who turned a |
| The keystone to building a successful business is your | | | | home business owner recently decided to have a |
| ability to raise hard cold cash. You may be planning a | | | | garage sale of all the stuff they didn’t need in |
| shoestring budget for your start up but even then | | | | the house anymore. I kid you not…they raised a |
| every business needs some working capital for building | | | | sizeable sum in just one weekend! |
| inventory, registration fees, insurance, for buying office | | | | 4. Family and friends: Borrowing from family or friends |
| equipment, maybe even space. For a smart home | | | | is a good idea when the amount you need is relatively |
| business owner there are several ways to raise | | | | small. It can be clubbed with part of your own savings |
| capital for the start-up. | | | | and novel fund raising ideas like a garage sale to help |
| We have summed up some of the most obvious | | | | finance your business. This is an easy way to raise |
| ideas for funding and some not –so-obvious ones | | | | funds, as these are the people who know you well |
| as well. If you have a robust business plan at hand and | | | | and need fewer assurances. It is also unlikely that they |
| can identify what is the best source of raising capital | | | | will drag you to a court if your business takes longer to |
| for you, it shouldn’t be all that difficult to get | | | | get profitable and repayment is delayed. But take care |
| someone to show you the way to the vault. | | | | that money does not sour your relationships; be |
| 1. SBA Loans: The Small Business Administration is a | | | | professional in your dealings with them and get a |
| government organization working towards promoting | | | | formal agreement drawn up in order to put the terms |
| the small and home business segment in the US. | | | | of the loan in writing. |
| Though SBA doesn’t issue grants or make loans | | | | 5. Venture Capitalists: Venture capitalists are |
| directly, it is still one of the best sources of funding for | | | | professional investors who may be in charge of a |
| the home business owner. The reason is that SBA | | | | large pool of capital gathered from a range of sources. |
| guarantees loans made by private lenders to you as a | | | | These firms invest in new, even high-risk or speculative |
| home business owner. One of the biggest problems | | | | businesses without a proven track record, with the |
| you will face as a home based entrepreneur looking | | | | potential for rapid growth and high returns in a short |
| for funding is trying to prove you are not a fraud and | | | | time. Take a look at to get you started on this line of |
| have the capability to return the investors’ | | | | credit. |
| money. So the SBA guarantee reduces or eliminates | | | | 6. Angel Investors: Angels investors are relative to |
| the risk inherent in a new business venture, gives | | | | venture capitalists and usually less demanding in the |
| credibility to your business and makes it easy for | | | | returns they expect. These are private investors who |
| moneylenders to forward money to you. | | | | expect their investments to make more money than |
| For more information visit the SBA site at: | | | | through the traditional markets. An angel investor could |
| 2. Commercial banks: Taking a loan from a bank is a | | | | be your doctor, accountant or attorney who seek out |
| good option because banks don’t require you to | | | | new businesses to invest in return for equity |
| turn over equity or company control. However, you | | | | ownership. Also see: |
| must have the confidence and a strong plan to make | | | | Some other good sources of funding are Industrial |
| your business start making profits regularly or else it | | | | banks, home equity loans and loans on credit cards. |
| can get sticky paying the bank loan back. To get | | | | Some other not so obvious ways of raising capital can |
| access to bank loans you have to have collaterals and | | | | be equipment leasing and advertising. Another area, |
| must be able to prove your capability in your start up | | | | which you can explore, is personal grants from |
| area. | | | | corporates. For more information take a look at [ |
| 3. Personal Saving: This is a favorite with a large | | | | So arm yourself with a solid business plan, |
| percentage of first time entrepreneurs because it is | | | | determination and the right kind of information on what |
| the easiest way to get money (if you have it!), and you | | | | investors are looking for. You will hit the ground running |
| have no liability to any outside lenders. So if | | | | with some of these ideas above. |
