For many people, finding the right funding source for your new or existing business can be a struggle. Every business is unique in the way it is operated and managed. A good portion of that uniqueness comes from the person who owns and runs it. It’s their baby, and since it’s their crown jewel, they’re going to make it there own and run it how they would run anything!
Sometimes that’s a good thing, and sometimes it isn’t. We all know that not all entrepreneurs are created equal. Some are better at managing capital than others, yet, in order to begin, grow or expand your business, sometimes you just need a little financial help to get things moving.
When that time does come, there is an abundance of sources on the web all looking for the right venture to invest in. I think sometimes many of us get caught up in this mist of doubt thinking that those who have money just want to hang on to it for as long as they possibly can. The truth is, most likely, the reason they have money to lend is because that’s the way they have made their money. They’re looking for something mutually profitable to get involved in, or to fund, in order to continue growing their assets.
In my book, there are two types of funding available, and what you need the money for will determine which funding type you’ll want to look into.
Short Term Funding for Your Business
Many hard money lenders would qualify for this type of funding, from angel investors to private lenders in your local area. When looking for short term funding, just as your potential investor would want to know as much as possible about you and what you’re requesting the funds for, I feel it is as equally important that you know as much as you can about the investor and his or her loan terms.
Many investors want to put some money in and get their money back, plus a return within 3 to 6 months. Residential and commercial contractors use this type of investor. They get the funds they need to build the home, sell the home and then pay back the investor, plus interest.
All you have to do is hit the dirt in order to find these types of investors. Many times it’s through a friend or acquaintance that you’ll most likely meet them.
Another source of extremely short term funding you might consider is something like USA Cash Services, or what we’ve all heard as pay day loans or cash advances. I haven’t had to use this method of funding personally, but if you require capital for a very short period of time, it’s an option. And whey I say “short period of time,” I mean a week or less. The interest rate is too high for anything longer than a week or two. But if you need it quick, say for a marketing campaign which has a guaranteed return, it’s an option.
Long Term Funding for Your Business
In my opinion, it’s always better to find a lender who is open to long term lending. Tight time restraints can cause an extreme amount of stress, and stress is never a good thing for a business to have.
In my opinion, longer term funding is money borrowed for a period of two to five years. This is where many angel investors, private investors and banking institutions come into play. With the right business idea, a detailed business plan and the right person, finding a long term loan shouldn’t be difficult.
Heck, depending on who the investor is, you might propose equity in your company for an investment instead of taking out a loan which accrues interest.
There are several different websites that investors are connected with, looking for companies to invest in. Just as an example, I’ve signed up with Startups.co, which, aside from their database, sends me an occasional email with their most active investors. So if you’re looking for investors, it’s a great place to get started.
In Conclusion, be smart when choosing your funding sources. If you have a great business, or a good plan to start one, sometimes the first investor to say yes isn’t always the best investor to work with. If you’ve watched “Shark Tank,” you’ll know that Mr. Wonderful isn’t always the best deal but usually the first to make an offer. Depending on your business, he may or may not be the right one to work with.
Make the right choice for you and your company.
David Allred is the author and creator of CFW. David has been teaching entrepreneur minded people how to earn a full time income working from the comfort of home for nearly a decade.
Think about it. Never miss your kids’ events, set your own schedule, choose your own income and enjoy a lifestyle and income which most people only drool over!
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