Are you ready to start your small business but still don't have the money you need? There are a lot of ways to get money to start a business. Here are a few really good ways to get the money you need to start a business or help it grow.
- Friends and family
Some people are lucky enough to be able to get money from family or friends to start a business. Unlike credit cards, this doesn't hurt your credit score, but it can hurt the reputation of your family.
Loans from the government (SBA)
This is short for the U.S. Small Business Administration, which is a government agency that helps people start and run small businesses in the U.S. by giving loans, helping after disasters, advocating for small businesses, and giving training.
- Peer to Peer Lending (Prosper)
People can lend money to each other directly through Prosper, an online auction site. Borrowers choose the highest rate they are willing to pay, and lenders choose the lowest rate they are willing to accept. Prosper matches borrowers with lenders and takes care of loan payments. Lenders can start with as little as $50, and borrowers can borrow up to $25,000 without putting up any collateral.
- Venture Capital Firms
A venture capital firm is a financial middleman that pools the resources of its partners and uses the money to help entrepreneurs start new businesses.
- Loan on the value of your home
Some people call it a "second mortgage." Use the value of your home as collateral to borrow money from a bank or mortgage company.
- Payment cards
It can be tempting to use money from a credit card to start a business. Make sure to make at least the minimum payment each month to protect your credit score.
- Angel Investors
Most angel investors are business owners or executives who have retired. Most of the time, angel investors can give more money than friends, family, or credit cards.
Most loans are between $20,000 and $2 million.
All of the resources listed above are helpful in their own ways. You just have to figure out which one will help your business and situation the most.
Pick wisely.
