6 Ways to Source Funds Without Taking Out a Personal Loan

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There are those who wonder whether there is a best way of boosing the finances of a novel business enterprise. Some go ahead to ask whether there is need to invest in a new business enterprise.

The truth is there are a variety of ways to finance a new business; the most appropriate for you is dependent on the products you have for marketing and your own peculiar financial condition. Here then are helpul guidelines for you.

Savings and Investments

Your own savings and investments should be your first recourse when you are planning how to finance your business. This ensures self reliance. It is better to take risks with your own funds and not someone else’s.

Friends and Family

You can also turn to your family and friends especially when you are quite close to them. You can ask them for a financial lift only if you are sure of refunding them. Know that your relationship with a family member or a friend can be threatened by the fact of your owing them.

Credit Cards

There is also the option of boosting your business with the use of credit cards. But you must know that there is a flip side to this lucrative method. Te interest rate of this scheme is pretty high and you will only be able to offset your debt only if the business you invested in yields lots of money; otherwise you might have to settle debts for a long time.

Mortgage The Farm

How many  banks are willing to give a loan without a collateral? The answer is almost a blank none. You therefore need valuable collateral to be entitled to a loan. Such loans are usually preferable to running your business on credit cards. This scheme is not without its own challenges. You are obliged to pay back what you owe; it does not matter whether the business you invested on was successful or not.

Angel Investors

An angel investor is an individual or firm who puts in some investments at the inception of your business in order to own a share in the venture.  An Angel investor is often the source of the initial capital of a business. The parcel from an angel investors are often tied up in various strings. It is in your own interest that you are sure of the meanings of whatever string is attached. The best way of working with angel investors is by making sure you sign favourable agreements with them.

In the end, watch your priorities. Be sure of not squandering what would have been useful for your business on trivials.

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