Start Up Funding

Unless you've been living under the proverbial rock, you're aware that we're starting to hit a credit crisis in North America.

Well, with the prospect of credit drying up, how can you get funding for your business?

1. Well, if it's a smaller business, one option is through private lending rather than corporate lending. We have been conditioned to think of loans as something offered solely through banks, but in reality the world is much more flexible. Family and friends can provide loans with interest rates below what you see at banks. Even strangers might be willing to invest or provide funds if you have a solid business plan.

2. Credit cards are the funding source we hear of in stories. There are the businesses that start off funded by credit cards, but as credit cards carry such a high interest rate they are not your best option. A personal line of credit is a better option if you are willing to put your own credit rating on the line.

3. Lastly, think of scaling back your operation. As a business, we always think of starting big, but often a smaller version can be launched at a lower cost. If the credit isn't available at the present time, a smaller version of the business can act as a proof of the business concept to secure further loans.

So, while credit options are drying up, that doesn't mean you have no options. Explore friends, family, and even make your case to strangers, as they can often be more flexible than banks. Avoid your credit cards as it charges high interest, and think of a limited launch of your company. Progress is progress even if it is slow.

TAGS: Credit, Credit Card, Credit Crunch

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