| Starting an Internet or home-based business may not | | | | competitive and have strict rules about money usage. |
| require a lot of capital, as you do not need to find | | | | Moreover, there is no guarantee that you will receive a |
| office space and hire several employees. However, | | | | grant, so you need to keep other options open. |
| you need basic infrastructure for your business. You | | | | Government agencies can also help you with the legal |
| would also need to:o Market your businesso Build a | | | | and administrative aspects of starting the business. |
| client baseo Pay bills for operational expenses | | | | Friends and family: The most common source of funds |
| To tie over these regular expenses, you may need | | | | for entrepreneurs is a group of friends and family. |
| much more capital than what you have in your | | | | However, you must treat these investors as business |
| account. | | | | relationships and reveal the use of money. You should |
| In such cases, there are several sources that can fund | | | | also show the manner in which you intend to repay the |
| new small companies. However, seeking and securing | | | | funds. You may decide to pay interest or make them |
| cash requires:o In-depth and cautious researcho | | | | your partner in business. |
| Excellent negotiation skillso Persistent commitment to | | | | Loan: You can borrow against your 401(K) plan. |
| your new business | | | | Alternatively, you can get a loan against your home. |
| Sources of Start Up Capital for Small Business | | | | However, you might lose your home if the business |
| Sourcing start up capital for small business is among | | | | fails. Use this option only if you are assured of the |
| the most daunting tasks for new entrepreneurs. Most | | | | success of your business. |
| entrepreneurs find money through banks, private | | | | Insurance policy loan: You can receive up to 90% of |
| investors, suppliers, customers or professional angel | | | | the cash value. Your policy remains in place as long as |
| investors. The source is dependent on the manner in | | | | you pay your premiums on time. |
| which you want to raise the funds and pay it back. | | | | Strategic investors: Suppliers and customers may also |
| Banks: They are a direct source of funds. Several | | | | decide to back your business. If your product or |
| banks offer loans to small businesses that are already | | | | service complements that of your supplier, they might |
| operational. However, you will need a business plan | | | | invest. However, accepting funding from a supplier |
| and a personal guarantee to convince the bank of | | | | might prevent you from using the supplier's |
| your venture. Since the funds are given as a loan, you | | | | competitors. |
| must generate substantial cash to payback these | | | | Private angel investors: These investors are similar to |
| loans. You can find banks through the yellow pages or | | | | professional venture capitalist firms. You need to |
| via the Internet. | | | | convince them of the viability of your business plan. |
| Government: The government also assists in the | | | | These angel investors expect a return in the form of |
| survival of small businesses by providing them with | | | | IPO, acquisition or stock buyback over the period of |
| various grants through the Small Business | | | | three to seven years. |
| Administration (SBA). However, these grants are highly | | | | |