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Money to Start a New Business

 

How do I find the money to start a new business?  This is the first question most entrepreneurs ask themselves.  There are quite a few options to consider, but Business Finders can simplify the process and get you a business loan fast. 

 

Simply fill out our short form and the experts at Business Funders will connect you with the best lenders for your situation. 

 

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Some of the best sources for start up capital are Bootstrap Financing, Small Business Administration Loans, and Venture Capital. 

 

Bootstrap financing involves using the resources that you have, basically sweat equity.  This is a great place for all new businesses to start.   Bootstrapping could include using your own money from savings, 401K’s, etc., but also refers to using sources such as 30, 60, or 90 day credit from vendors and prepayments from customers. 

 

The Small Business Administration will guarantee a portion of a bank loan for many startup companies.  This is one way a new venture can get a loan through a traditional bank.  If a loan is partially backed by the SBA a bank, which can have strict loaning criteria, will be more inclined to loan to a small business.  There are two types of SBA loans, 7a Loan Program offers money up to $2 million and the MicroLoan Program which will loan up to $35,000.

 

The third common source for money to start a new business is venture capital.    Venture capital is private money and is a great option when a traditional bank loan is not available.  By using venture capital you are giving the investors a stake in the equity of your company.  These loans come from either venture capital firms or angel investors.  Venture capital firms pool investments from individuals to lend to various businesses.  These loans are sometime very large.  Angel Investor Networks are smaller groups of individuals who put their money together to invest in companies as a group.