subject: Startup Business Financing: How To Find Funding For Your New Small Business [print this page] Having a tough time finding funding for your new small business? It's no mystery that one of the main reasons businesses fail is lack of capital.
So to help better prepare yourself for success in your new business venture I've put together a few tips and funding options you may find useful.
One of the key steps you should first determine is how much funding you need to not only start your business but also stay in business too. Don't make the mistake of underestimating these numbers by projecting unrealistic revenues from future sales.
Next, plan a short term and long term startup business credit strategy which consists of funding the launch of your business (short term) and building your business credit files (long term).
Starting a new business involves risk and limiting the use of your personal credit and personal guarantee should be a priority for you.
Unfortunately, many business owners fail to establish business credit separate from their personal credit right from the onset. As a result they find themselves back peddling and end up relying on their personal credit to finance the growth and expansion of their business.
Only after they exceeded their personal credit capacity do they realize that building business credit should have been part of their overall strategy. Don't let this happen to you!
Some of the more popular options you have for startup business financing (short term) include:
P2P Loans
Microfinance Loans
Social Loans
Loans for Small Business
Business Credit Cards
Startup Business Grants
By also building your business credit files (long term) your business will be in a position to qualify for its own financing at much larger amounts without using your personal credit or personal guarantee.
Some of the funding sources that result from building business credit (long term) include:
Vendor Credit Lines
No Personal Guarantee Business Credit Cards
Business Line of Credit
Equipment Leases
Fleet Programs
Remember, you can obtain 10 to 100 time's greater business financing with a strong business credit file than you could using your personal credit.
When you compare corporate credit vs. personal credit there are many critical things to consider including protecting the corporate veil.
Finding funding for your new small business can seem like a serious challenge in today's economic environment especially if you resort to conventional means. There are quite a few creative business financing options available so don't get discouraged.
Part of building a successful business is putting a sound business financing strategy in place for both the short term and long term needs of your business. By doing so you can overcome one of the most common factors that cause businesses to fail which is lack of capital.
