7 Ways to Finance a Small Business
The road to starting a successful business can be a long one, filled with many hurdles and obstacles along the way. Even if you have a great business idea, no business can succeed without a financing plan. While the process may sound daunting, there are many small business financing options, each with their own advantages and disadvantages. Here’s a brief summary of startup business financing options for anyone thinking of starting their own business in 2012.
- Small Business Administration Loan
The Small Business Administration (SBA) was started in 1953 to encourage small businesses and entrepreneurs to start their own businesses. Under the SBA, there are two types of loans that can help borrowers to get the capital they need to start their business: a 7(a) guarantee small business loan and the 504 fixed asset small business finance program. The
7(a) guarantee loans for small business are more common for small businesses and can be applied for at banks participating in the SBA loan process.
“Both programs look for businesses not in the startup phase,” said Chuck Evans, managing director at the South Eastern Economic Development Company of Pennsylvania. “They look for businesses two years into business cycle that are generating cash flow.”
- Friends and Family
- Home Equity Loan
- Credit cards
- Angel investors
- Venture capitalists
- Strategic investors
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