Small Business Credit and Financing [Bank Loan Option]
This is the first option that most people consider when looking to raise money to start a business.Banks now days are much more careful to whom they loan money to and unless you have a good relationship and a good credit
rating you are going to find this option difficult.
It is also a good
idea to shop around for a loan and find the cheapest interest rates,
don't just take the first option available to you .Simply business at
www.simplybusiness.co.uk offers you a good search facility to compare loan rates and provide other services
Small Business Credit and
Financing Credit Cards
Credit cards are an obvious choice of borrowing money for your
business but as I' m sure you are aware that this can get out of hand
very quickly, so if you are using this option keep a tight reign on your
If possible it's a good idea to have two separate
credit cards one for your business activities and the other for your
personal spending.So when the time comes to do accounts for the business,
you will have an accurate record of your business expenses.
Borrowing from Friends And Family
This is a great small business credit and financing option that is undervalued especially if you can't borrow money in the usual way or have a poor credit rating. Ask friends and family to loan you the money based on your relationship (trust) with them, this is a good way to raise money.
Create Your Own Loan Agreement,
you should aim to keep this arrangement as legitimate as possible and you might want to consider
using a solicitor to draft a loan agreement to keep it official.
simply lays out the details such as the loan amount, length of time and
repayments. This shows people that you are serious about your business and helps reassure them, that investing in you and your business is not a high risk strategy.
You can also reduce your legal cost by using a promissory note also know as a ( Loan Note, I.OU,) which is less formal than a loan agreement, but still a legal document that lays out the relevant loan details clearly Save Money on Promissory Note Here
What I Did to Raise Some Money
The small business credit and financing option that
I used to raise money for my franchise was to ask a family member and a
friend of mine to loan me the money .I also involved them in my business by showing them the franchise and my business plan
By doing this they could see that I was very
serious about the franchise, and that the return of their money was
100% guaranteed. We also agreed a loan amount and how much I could afford to pay back each month.
The best part for me was paying each of them some interest each month as a thank you for lending me the money.Why pay the interest to a bank when you can give it to friends and family. A Win- Win situation for everyone
Small Business Credit and
Financing Council Grants
Did you know that if you start-up a business you may be eligible for a local council grant or even a government grant. I did some research and found that most local councils offer some sort of start-ups grants or even a loan with a low interest repayment structure.
This is something worth
investigating further especially if you can't get a loan through the
normal way. One of the best options is your local council's web site to
see what grants they have available and if you match their eligibility
Final Words For This Page
I have listed a few organizations on the next page to help you get started including a very good audio on funding options which you should listen to.This audio covers some small business credit and financing options that are not covered here and is worth you investigating further.
The information is from an expert who is experienced in various types of funding and is around 25 minutes long, but well worth the listening time if you need some additional information on funding options, please go through to the next page to access this audio. If you have any questions please get in touch and I'll do my best to point you in the right direction.
Small Business Grants More Info
Small Business Loan More Info
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