How to Get Funds to Start a Business

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Bootstrapping – Tap into your personal resources, such as lines of credit, credit cards, home equity and liquid assets.
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Family and friends may want to invest in you and your idea.
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Small Business Association – The SBA offers a variety of assistance. Look into SBA-guaranteed loans. You may be able to get an SBA guaranteed loan to buy an existing business as well.
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Your local bank – Harder to obtain, bank financing requires that you create a thorough business plan, offer proof the business is viable / sustainable and have a very good credit rating. You will probably need collateral, such as your home.
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Grants – There are a number of grant programs to assist business owners. Look into all of them. There may be a grant program suitable for you. There are grants for women. There are grants for minorities. There are grants for teachers and others.
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Equipment leasing
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Community Development Financial Institutions (CDFIs) – Visit The Coalition of Community Development Financial Institutions to find all that’s available.
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Bank-term loans – A fixed amount to be used for business needs, such as purchasing real estate.
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Asset-based loans – This is where you use an asset you own as collateral for the bank loan. Offering collateral makes the borrower more attractive even if you have risk characteristics.
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Private loan guarantees – Find an investor to fund your business.
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504 Loans – An SBA loan program offers long-term financing to accomplish economic development in communities throughout the United States.
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Royalty financing – A loan against future sales.
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Venture Capital – Investment companies that are licensed by the Small Business Association are known as Small Business Investment Companies or SBICs. They make small business venture capital investments and loans.
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Angel investors – Private investors, entrepreneurs and venture capitalists who are willing to invest in new businesses.
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Business Incubators – A phenomenal resource for new business owners, these “incubators” help you succeed as the name implies by cushioning and nurturing your start-up with easy access to loan programs, services, office space and education.
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Direct public offerings – Selling shares of your corporation to investors.
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401K financing – Fund your company with your retirement account from a previous job. Be careful of tax penalties.
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Initial public offering (IPO) – An investment banking firm will sell the equity in your company through shares of common stock. The shares then trade on the stock market.
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Institutional business capital – These are managed funds willing to invest in new businesses displaying excellent potential for growth.
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Reverse merger – A private company buys a publicly traded company that is usually dormant. In so doing, the private company becomes a public company. It’s easier than the traditional IPO process.