- 1). Write a business plan. Your business plan should be a detailed road map for the start-up and operation of your business. It should cover the first few years of operations and include biographies of the principal owners, an analysis of the business opportunity and detailed financial projections, including anticipated expenses and revenue. The plan should have thoroughly researched facts and figures, including a SWOT analysis--strengths, weaknesses, opportunities and threats.
- 2). Look for grants or matching funds as part of a community reinvestment act or some other program. There may be local, state or federal money available. The drawback to grants is that competition is almost always fierce, and grants for for-profit enterprises may be scarce. Visit Grants.gov to find grants that might fit your business.
- 3). Seek so-called "angel investors." Angel investors are usually friends and family members who believe in you and your plan. Unlike banks, angel investors generally do not expect you to pay them back in monthly installments--if at all. An angel investor may be content with a small ownership stake.
- 4). Tap into your retirement savings. This is obviously risky because if the business fails you will have squandered money you put away for the future. However, 401k accounts and other retirement plans can be used to finance a business.
- 5). Use lines of credit. Many new small business owners start out by tapping into their own credit resources. Three partners in a new business may have enough personal credit to provide the first start-up capital. For even more capital, the new owners could explore home equity loans or other personal lines of credit.
- 6). Get a business loan from your bank. Although this may be tough, it isn't impossible. According to the U.S. Small Business Administration, you and your partners will likely be asked to personally guarantee the loan and will be fully responsible for paying off the loan if the business fails. You may be asked to pledge collateral, such as stocks and bonds, certificates of deposits or real estate.
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