ORIGINALLY PUBLISHED: APRIL 2023
Financing for Small Businesses start-up, entrepreneurs and small businesses are terms that are used interchangeably to describe an institution created to offer a new or existing product or service under conditions of extreme uncertainty. The riskiness of entrepreneurship is one of the reasons financing is such an important focus.
Financing your business depends on your business goals, what you intend to accomplish, and how much is needed. Most experts recommend a having business plan, your business road map. A capability statement also works well to help you strategize your financing needs. Whatever you choose make sure it is a well thought out plan using your balance sheet, profit/loss statement and creating a company value worksheet to guide your decision-making. If you are unsure of this process hire an expert.
The opportunities to gain financing are many and there is much to consider with each of these options.
Some options for financing are:
• Personal savings
• Retirement Accounts
• Friends and Family
• Home Equity Loan
• Life Insurance Policy
• Credit Cards
• Business Loans/Lines of Credit
• SBA 7(a) Loan
• Crowdfunding
• Microloans
• Angel Investors
• Pre-Sales
Consider the pros and cons for each option above, all come with a level of risk. However, select the outcome for your business type and your risk comfort. Most importantly, seek the advice of an accountant or business consultant; it will pay for itself in the long run.