Many people have great business plans and ideas but no funding. Lack of capital is the main reason many entrepreneurs fail to start a business. With the rate at which technology has grown and the ability to connect with people around the world, there is now hope for your dream of starting a small business.
Things You Will Needpen and paper
Create a business plan. To gain capital for your start-up business, you will need some type of business plan. You will need it to be articulated well and easy to understand. The main purpose of this step is to add a little salesmanship to your side. You will need to convince people who you are capable of repaying the loan.
Use Prosper. Prosper is an online lending network that connects the lender and borrower through a network over the internet. You will have to fill out paperwork regarding your credit rating and job status, but this will enable you to connect with thousands of people across a broad network of lenders.
Angel investors. An angel investor is a type of lender who loans capital to start-up businesses that are normally considered high risk to other lenders. Angel networks are similar to prosper except the fact that they connect you to investors with a lot more capital to lend. Where prosper is designed for typical lenders, angel investor networks are more in line with a business in need of start-up capital.
Get government grants. The government offers you grants for start-up businesses. They usually take 6 months to get back with an answer, but you don't have to repay the loan. It is essentially a gift from the government to spur economic growth. The amount of money you get depends on the type of business you want to start and your situation, but you are limited to the number of grants you can get.
Approach a Venture Capitalist. Venture capital companies offer high risk start-up companies capital in anticipation of high company growth. This type of loan is usually for the more desperate of borrowers because of its terms and conditions. Venture capitalists usually want some percentage of your company in exchange for lending you the money. You can find these types of investors online or in person.
Step 6Verify and read the fine print. Before you close a deal, check the legitimacy of a company by visiting the Better Business Beureau website and looking at the complaints left by actual customers. You will also need to read the fine print of your loan contract and make sure it doesn't require unreasonable repayment terms.