Plan The Financing Of Your Business

You may be thinking, "OK, this all sounds fine.  But where am I going to get the money I need to start a business?"

First of all, you may not need as much money as you think.  If you pick a service industry  where you'll perform a service for people, you won't have to spend any money to maintain an inventory.  When you first start out, think bootstrapping.  "Bootstrapping" means starting up a business with the least possible expenditure of money.  Try to think about using materials you already have, and using cheap advertising such as Internet search engines and leaflets.  Above all, try to do an excellent job with a very friendly attitude, which will establish a good reputation of your business by word-of-mouth, the cheapest form of advertising.

One advantage of business loans is that the interest you pay is a tax deduction.  When you need money, think about the following loan sources:

	Plan The Financing Of Your Business   Time to complete:   Varies Money you'll spend:   Application fees may be necessary for some loans. What you'll get:   Thousands of dollars in credit (just make sure you can pay it back.) Some possible loan sources:  A home-equity loan, which will give you a low interest rate.  You can usually borrow about 75% of home equity value. If you have life insurance, you can borrow from it at low rates. If you own stocks and bonds, you can get a "margin loan".  There is no set payment, you can just let the interest grow if you need to.  You can borrow about 50% of your stock portfolio's value, and 90% of the value of your bonds. You can borrow up to 50% of your 401(k) plan, to a maximum of $50,000. Small Business Administration (SBA) loans have a higher interest rate, but you can pay them back over 25 years, so the monthly payments are low. Credit cards are very convenient.  Consider a credit card for the exclusive use of your business, then deduct the interest payments. You may be able to get an advance on money that is already owed to you.  For example: some contractors get paid half of their fee when they schedule a job, and half when it's actually finished. Further Reading: Small Business Administration online site. Financial Magazines, 90-day risk-free trials Financing the New Venture : A Complete Guide to Raising Capital from Venture Capitalists, Investment Bankers, Private Investors, and Other Sources, a top-rated book available at Amazon.com. Free Money for Small Businesses and Entrepreneurs, a top-rated book available at Amazon.com that teaches you how to get funding from government and non-profit sources for your new business.

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