There are some new businesses that
venture capitalists and angel investors are just not interested in funding.
There are some businesses that banks are not too fond of investing in as well.
Well, an
entrepreneur of such a business proposal should not worry too much. There
are other sources of funding that can help get the new business off the ground.
There are some Internet sites that offer loans to small businesses and micro loans
from small lenders are also available.
However, the first source of funding for a
new business usually comes from the entrepreneur. After all, the entire
business is the entrepreneur’s idea, so some money does need to come from him/ her.
One way that an entrepreneur can get some capital
resources for the new business is by selling personal assets. Entrepreneurs,
who have assets such as boats, time-share and second properties, can sell these
to raise capital for the new business.
Entrepreneurs could also borrow against their homes to
raise capital for the new business ventures. This is the oldest trick in
the book and it is one that works very well. Entrepreneurs can borrow against the
equity of their home. Of course, this also means that entrepreneurs need to make
larger monthly repayments. Another way to get money out of the home but maintain
a lower monthly payment is to refinance the mortgage with a new one.
Entrepreneurs could also borrow against their insurance policies to get
seed funding for the new business ventures. Entrepreneurs need to borrow
against their life insurance for this purpose. Raising startup funding through this
method is relatively simple. All that an entrepreneur needs to do it to call up
insurance agent and discuss the details. However, an entrepreneur who dies with
an outstanding policy will only provide diminished benefits to the family.
Finally, family and friends are always great sources of capital for the new business.
An entrepreneur can speak to a couple of friends and family members and borrow the
money required to start the new business.
However, when borrowing from family and friends, an entrepreneur needs to be careful.
The situation can get bad when the business does not do well. Usually, family and
friends tend to react to this situation in a very emotional manner.