Owning a business, like a house, is a part of the American dream. It's challenging, hard work and if done well, can be personally rewarding and profitable, but it takes a lot of MONEY! Let's take a look at what sources are available to fund your business and expansion projects.
The first hurdle you must get over in securing financing for your new business is coming up with a down payment.
Unless you're wealthy, you're going to need to borrow money to start your business. There are three things to keep in mind about borrowing money:
- The bigger the down payment you make, the less you'll have to finance and the more you'll save in the long run.
- The larger the loan the more income you'll have to make in order to meet your loan payments.
- The shorter the loan length, the higher the monthly payments but the lower the total interest you'll wind up paying.
In addition to tapping your savings, or friends and relatives, you can of course get financing from other sources. There are various types of commercial (or non personal) and personal loans, including secured loans, unsecured loans, home-equity loans and lines of credit, retirement account loans, and life insurance loans. Also, a business owner who is strapped for cash can factor invoices to raise money. To determine your best source of cash, review the following information and become familiar with the loan terminology in the related links.
