Home Based Business Financing Guide
You want to take the home based business plunge. Youíve found just the right home based business idea and have the know-how to do it. The trouble is you need money to get your home based business up and runningóand it doesnít look like youíll be coming into an inheritance anytime soon.
Well, the good news is there are several resources available to finance your home based business. Youíll have to do some research to find whatís available in your area, but this guide will show you several areas to begin looking to get the financing you need for your home based business.
The Small Business Administration (SBA) is an excellent place to turn to for home based business financing. It doesnít make grants that your home based business wonít have to pay back, nor does it make direct loans to small and home based businesses. Instead, the SBA guarantees loans given by private lenders. This reduces the risk associated with new business ventures and makes it easier to get lenders for your home based business. However, to get a SBA loan, your home based business must be a profit making one, and you will have to guarantee your loan personally. This means putting your personal assets at risk. Also, to be eligible for an SBA assistance and/or loan, your home based business has to be in the United States, and thereís other criteria that must be met. Still, if youíre looking for financial assistance to start your home based business, the SBA is a good place to start.
Private grants are another type of financing you can look into for your home based business. There are many different types of grants, and there could likely be one for your home based business. The Internet is a great place to do your research. The grant process can take awhile, so if you decide this is the route you want to go for financing your home business, and your home based business meets the criteria of a grant, you will want to get started with the grant writing process as soon as possible. Also, you may need to hire a grant writer to help you. Grant requirements are strenuous, and thereís a great deal of competition for small and home based business grants. Itís well worth the time and effort to research grants, though, to try to get a grant for your home based business because the money given does not have to be paid back.
Another type of home based business financing is through whatís called angel investors. These are investors who are willing to lend money to fledgling small and home based businesses, generally because they know a good thing when they see it and are willing to take some risks. Angel investors for home based businesses may not be that easy to find, but with some networking in your area, youíll be able to locate several. Joining your local Chamber of Commerce is a good way to find angel investors. Also, talk to accountants who may be able to bring together several investors for your home based business. This happens a lot more often than you might think because investing in a small or home based business can provide a good tax break for many people. And then there are just some good souls out there who want to help others start home based businesses because theyíve been there themselves and managed to create successful home based businesses of their own.One final note. The only investors to be wary of for your home based business are those you might find in your own family. It just simply isnít a good idea to borrow money for your home based business, or for anything else for that matter, from family members. There are just too many things that can go wrong in a financial obligation like this. A family member you borrow money from to start your home based business may pressure you to run the business their way, or worse, your home based business could go under and have to declare bankruptcy. Itís horrible to lose any investorís money, but when itís Uncle Davidís, itís much worse. So only borrow money for your home based business from family members as a last resort, and only if youíre certain you have a sure thing.
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ABOUT THE AUTHOR
Copyright © 2006, Charles Fuchs, President of Vision Management Enterprise Inc., is an established online marketer who specializes in helping people start their very own Work at Home Based Business.