Whether you are the owner of a chocolate factory or you specialize in outsourcing talent, each business is unique in their own way. Before you go deep into the aspects of business, you have to avail start-up loans to help leverage your business. While this takes care of the financial aspect, you can visit www.business2community.com and read trending articles on digital marketing and stay updated on the business front.
Need For Start-Up Capital
The common expense incurred by business owners include:
· Purchase of stationery, equipment, machinery, and so on
· Advertisement costs like signing up for a domain name and registering for a website
· , legal and corporation fees
· and rent
The total amount needed for your business varies significantly, and you should list all the needs and wants to avoid overshooting the budget. At times, you might get overwhelmed, especially if it’s your first business venture. Write down the immediate requirements and gradually move on to the next step.
Different Sources Of Capital
Determining the total capital will facilitate in identifying the source of money.
· Your Piggy Bank
Did you just think of breaking open your piggy bank and using the money to fund your business idea? It is a fairly good idea as you will not have any creditors to pay back, and you are not answerable to anyone in case your business has a slow start.
Let us take a look at it this way. Most of the people save their money for a rainy day in the future. If someone has bequeathed you a large amount of money or if you are going to get rich overnight, you might as well use the money from your personal savings.
· Business Loan
You can use the amount to buy essential supplies, machinery, and fund other expenses. Most of the business loans require the borrower to pledge a collateral as security. You must repay the loan amount within the stipulated period (with interest) to avoid penalty.
Further, the lending bank will verify your credibility to check if you are eligible for the loan or not. You might be required to submit financial documents like your bank statements, IT returns, and any other information that is necessary.
· SBA Loans
If you fail to qualify for the business loan, you can avail SBA or Small Business Administration Loan. You must qualify certain requirements as stated by the SBA. Here, you have an advantage of repaying the loan in small amount over a period of time. These loans are available for all banks, and the government acts as an intermediate body between you and the bank.
· Plastic Money
You can use your regular credit card to pay for the start-up costs. Do remember that unless you have the prescribed limit in your account, you will not be able to carry out any further transactions.
· Line Of Credit (LOC)
Obtaining a line of credit is simpler than applying for a regular loan. A business LOC allows you to borrow money and use it for your business. This unsecured loan is a type of short-term loan with the varying rate of interest.
This might not be suitable for you if you require only a small amount of capital.