Financing Sources for Your Small Business - SB011

Find the Right Biz for You Series (Part 10)

Welcome to Episode 11 of the Small Biz 101 Podcast – The 10th and final episode of the Find the Right Biz for You Series. We’ve covered quite a bit in past series episodes:

• Self-assessment
• Generating business ideas
• Business styles
• Business cautions
• Research - Is your idea a viable one?
• What will your business idea cost?

Now that you have an idea of the business costs, where will that money come from? In this episode, I cover the following sources of funding:

• Self
• Family, friends, associates
• Debt financing
• Grants
• Equity financing
• Crowdfunding

Self-funding

Funding the business with the owner’s own money is the #1 source of financing for most small businesses. It’s also the one I almost always recommend for my small business clients, if they can swing it. Where might your money come from?

• Inventory your assets
  • You may find you have more assets than you thought. Perhaps, an investment account that’s skyrocketed with the market the last few years.
  • You may find assets you can sell to support starting up your business.
• Savings
  • From what you currently earn
  • Consider moonlighting for the sole purpose of saving for your new business
• Personal credit cards If you go this route, be sure to get the lowest credit card rate possible and NEVER be late or miss a payment, as often those rates go up with one missed/late payment.
  • If using a currently-owned credit card, call the card company and ask to have your rate lowered.
  • If using a new card, get one with the lowest rates. Check out these sources to find current offerings for hundreds of cards: bankrate.com, creditcards.com, www.lowcards.com

• Home equity loan There may be tax benefits to going this route and usually the rates are lower than from other sources. Be sure you will be able to pay it back or you could lose your home.

• Borrow against retirement 401(k) accounts Last choice source of self-funding. If you g