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3 Tips for Finding Funding for Your Entrepreneurial Endeavors (15 hits)

Where the American dream might have once been to own your own home, it seems to quickly be becoming owning your own business. Technology is also making it easier than ever before to own your own business. No matter how small your business may be, however, it will not only take startup capital to get it up and running, but it will also most likely need funding along the way as you grown and expand. Here are 3 tips to finding funding for your entrepreneurial endeavors.

Invest Your Own Money First
No matter how much or how little you have to invest, the very first thing you want to do is invest your own money in your own dream. After all, itís going to be awfully hard to convince others that you believe in your business idea if you arenít willing to put your own money where your mouth is.

Approach Family and Friends
For many people, asking your family and friends to invest in your business is actually harder than approaching a bank or commercial lender that does not know you. The truth is, however, the more capital you can raise before you go looking for a commercial loan, the more likely you are to get one. In essence, the more skin you personally already have in the game, the more motivated you will be to protect it. The more motivated you are, the less risk lenders or outside investors have to take and the more favorable the terms you are likely to get.

Take out a Business Loan
If you only need to borrow 50% of your startup capital, you are more likely to not only get a loan but actually have lenders competing for your business. Competition always means more attractive loan terms. If you need to borrow 75% or more of your startup capital, not only will you have a hard time getting a business loan, but when you do, it will most likely be a short term loan at a very high interest rate. The shorter the term and the higher the interest, the harder it will be to pay back.

Even if you can raise enough capital on your own to fund your business, it is not a bad idea to take out a business loan anyway. Doing so can help you establish a solid borrowing history, which can help you significantly down the road when itís time to build or expand. While you definitely want to raise as much money as you can, you want to build your business on a blend of personal and commercial finances.
Posted By: Brooke Chaplan
Monday, March 11th 2019 at 5:34PM
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