The phrase “it takes money to make money” can be so frustrating! What’s an entrepreneur to do? There are a lot of hoops to jump through to get a loan, and if you don’t make it through one you’re out the door with no money and no business. Some people say to ask your friends or relatives, but that can be very difficult as well as damaging to your relationships.
What else can you do?
1. Work hard for someone else.
It might not be your favorite thing to do, but keeping your day job will provide some much needed funds. If you practice frugality and squeeze every penny, you should have some money to start your own business after a few months. Maybe you can set aside your entertainment budget because you’ll be too busy at night building your new business to go out.
2. Put the money from your business right back into your business.
I know it’s tempting to take those first payments and go celebrate, but it will be more profitable in the long run to use that money for something to advance your business. The internet makes it possible to start a small business with next to nothing and gradually build it up. If you can find a great online group you might be able to swap services; perhaps you can find someone to work on a joint venture with you. Remember not to undervalue yourself just to get another job.
3. Find someone to sell you an established business.
Don’t want to start from scratch? Find a business owner who’s ready to retire or who is motivated because of the economy. Make sure you get all the facts and have the business checked out so that you don’t end up in more trouble than you started with. Franchise businesses have the brand name behind their success and usually offer their owners some kind of training to get started.
4. Royalty financing, an alternative business loan.
Private equity firms loan you the money to start your business and your payments are based on a percentage of what you make. So you have to pay 2-6% of your monthly income to your creditors, but you fully own your company and on the months your business doesn’t make as much, it gives you a bit of breathing room.
As the old saying goes, “Where there’s a will, there’s a way.”
Hello, I am starting a real estate investing business and am in need of, preferrably, a line of credit which will allow me to pay contractors who I will choose to do the repair work on real estate properties I am able to buy. The line of credit will be more flexible for my business needs. I also need a certain amount of capital up front as well for earnest money and transportation. Once I am able to get a few deals behind me I will not need to use the line of credit very often. Can you instruct me on to my next step in obtaining the funds I need?
Thank you
MJ