In the world of business, they say money makes the world go round. This may be a little harsh but it is a reality notes Carlos Hank Rhon. Without the sufficient finances you cannot run your business properly no matter how well planned it is. In other words, business financing plays a huge role in the survival of your business.
Many owners and would-be entrepreneurs face difficulties as to where they can find a source to finance a new business. Here is a list of ways to finance that you might want to consider:
1. Contact friends and family. Raking in friends and family to raise funds could have a number of benefits, confides Carlos Hank Rhon. Firstly, one doesn’t have to commit to a specific time of returning money. Funds could be utilized without any fear of lock down as usually happens in case of banks and financial firms. Secondly, one doesn’t need to worry about interest on the money borrowed, explains Carlos Hank Rhon.
2. Establish a partnership with company or investors who are willing to put their money in your business, recommends Carlos Hank Rhon. There a two types of partners, the industrial partner and the capital partner. Industrial partners are those who invest their time, skill and effort in the business in exchange for a portion of the income while capital partners invest through contributing cash or property such as machinery to the partnership.
In establishing a partnership, your partner may impose a degree of control over your business besides having a portion of your income so make sure to choose a capital partner who has less demands and conditions and who you are comfortable working with.
3. Entice investors into your business. Approach possible investors and present a well formed plan that will convince them to invest. This is somewhat similar to partners. The only difference is that investors can only demand minimum control over the business compared to partners although that will depend on the level of investment.
4. Approach suppliers and make propositions. Convince them to give you supplies in a form of loan payable periodically. That way you will have your raw materials without releasing cash before you gain income.
5. Business loans. Inquire from banks and financial institutions like Carlos Hank Rhon for possible business commercial loans. However, not all banks support newly opened businesses. They are more inclined to extend loans to businesses that are already operating.
6. Get cash advances from credit cards. This is normally used for a quick fix of your troubles but this is not advisable for a long term solution because interest rates on credit cards can be very punitive. Try to get the introductory rates for lower interests.
7. Lease your equipment. Rather than spending your money to buy new and expensive equipment you might think of leasing them. Leasing generally reduces the amount of money you have to raise. Within the lease period make sure to save enough income to buy your own because leasing is more costly in the long run.
8. Avail of government programs. A Small Business Administration loan can be helpful in encouraging banks and institutions to extend business financing to establishments they might otherwise turn down. Generally SBA has the same conditions as an ordinary financing company.
9. Utilize your savings. It is time to use your long time savings for greater purpose. You might be a little hesitant but do not worry because if your business will succeed it will come back to you with twice its value.
10. Mortgage your property. Mortgage must be the last resort that you should consider because of the risk it can bring. If you fail to pay you might lose more than what you bargained for.
While above mentioned are some of the well known routes available for an entrepreneur, commercial lending is another option that could be well explored. A number of financial firms including Carlos Hank Rhon extend loans after studying the potential of the business on genuine rates. Such loans makes more sense professionally rather than leaning on relatives.
Content Source: Carlos Hank Rhon: Financial Choices for Your Business
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