Entrepreneurship is as American as baseball and apple pie. It is also a driving force in our nation’s economy. The Small Business Administration (www.sba.gov) states that small businesses make up 99.7% of all business employers, yet statistics show that 69% of new businesses typically survive two years and 51% survive only five years. Also, by now we’ve all heard that lack of funding is the number one reason these businesses go out of business. For example, “Only the strong survive”, and money is your lifeboat! Let’s be honest. If you don’t have the money to keep your business alive, the odds are against you.
But do not worry! Getting the capital you need to stay afloat is available, even in the current economic climate, but you have to be smart enough to find it! I’m about to share three (out of dozens) of ways to get financing for your business (in no particular order of importance):
1. Private Investors – Sometimes the best way to get the money you need to grow is simply by asking. I don’t mean the “pretty please” kind of thing. Of course, serious private investors/venture capitalists/angel investors want to see a solid business plan that outlines their financial needs, growth method, and payment method. It also helps if you include some of your own funds in the company to show the investor that you are sharing the risk of possible failure.
“So where do I find these investors?” Big question! They are all around you! A private investor might have a family member, a next door neighbor, a church member, or the person next to her in the elevator. The point is: if he can inspire someone with the capital to invest in his good idea, he’s good to go! The keys to this success are confidence in your business proposal and knowledge of your business idea.
2. Business credit with personal guarantee: This is by far the least attractive, due to the inclusion of credit. Additionally, the average American has a credit rating well below 680, making it almost impossible to personally guarantee any type of business financing. If you’re one of the lucky ones, you can use your good FICO scores as a “guarantee” to creditors that all the money you get will be repaid, or you’re willing to face the consequences of having a personal credit report. report.
“So what if I don’t have good credit?” Another great question! Do you know someone with a good credit rating? Many times, people will partner by simply adding this “credit partner” to the corporation and obtaining financing by using them as a personal guarantor. Once again, this implies a solid business plan for payment and even more trust. Be sure to put the entire partnership in writing and never enter into this type of Agreement without all parties involved being aware of all the potential risks.
3. Aging or stagnant corporations: This is definitely not a new idea. Banks are more likely to grant credit to a company with more than 5 years of history compared to a company that has 5 months. That gives them more confidence that they are working with someone who has stability and longevity. Understand that simply having an aging corporation does not guarantee the ability to obtain financing. Don’t let these scammers fool you into thinking you can buy a corporation that already has $1,000,000 of available funds that you can buy for $500. Does that make any sense at all? Would Donald Trump sell a $20,000,000 company for peanuts? Of course not!
I have found that the best solution is to buy corporations and add business lines to them. How do you do that? Well that is for you to investigate. However, you should always make sure that you are working with legitimate sources. It is easy? No, but success never is.
All in all, it is not impossible to establish and grow a profitable business. You just have to have the right tools to survive, and money is definitely one of those tools. Arm yourself with the knowledge to get the trading capital you need when you need it.
“Failure is not an option, but ignorance is…” – MJ Glover