Did you know that only about 50 percent of small businesses last longer than five years?
Many businesses fail because of a lack of cash flow. If you’re starting your own business and want to stick around long-term, you need to make sure you have plenty of money to keep things afloat.
Unless you have a rich family member who can give you a small loan of a million dollars, you’re probably going to need business financing in order to keep the lights on during the early stages of your business.
If you need help getting business financing, consider giving one (or more) of these five tips a try.
1. Work with a Private Financing Company
If you’ve been turned down by several banks, you might want to learn more about private financing companies.
There are lots of businesses out there that might be more willing to invest in you and give you a loan to get your company off the ground.
Before you apply for a loan with these companies, do some research to make sure they’re legitimate and don’t have sky-high interest rates.
2. Tap into Your 401(k)
If you’ve built up a nice nest egg for yourself, you might want to tap into those retirement savings to fund your next business venture. This isn’t a decision to be taking lightly, though.
There are tax penalties associated with early 401(k) withdrawal.
And, if your business is unsuccessful and you cannot replenish that money, you’re probably going to have to delay your retirement and will find yourself working longer than you’d like.
3. Look into a Home Equity Loan
A home equity loan might more accessible to you than a traditional bank loan.
This type of loan allows you to borrow against the equity you’ve built up in your home. Check to see how much equity you’ve accrued, then talk to your bank about setting up a home equity loan or home equity line of credit.
4. Apply for an SBA Loan
Regular personal loans can be hard to come by for small business owners, especially if you’re looking to borrow a substantial amount.
The Small Business Administration, on the other hand, is often a bit more willing to lend to entrepreneurs. They actually back loans for folks who have been turned down by other lenders.
Of course, in order to qualify, your business will need to meet the government’s definition of a small business. You’ll also have to meet other criteria laid out by the SBA.
5. Consider Crowdfunding
If you’ve got a great idea but no money to get it off the ground, you might want to give crowdfunding a try.
People love to donate to new, innovative businesses that are able to solve a particular problem for them.
Try setting up a campaign on a site like Kickstarter or GoFundMe and see what happens when you start promoting your new business idea.
Looking for More Business Financing Advice?
These five business financing tips ought to be more than enough to get you started.
Are you interested in learning more about financing your business, though? Or, do you need help managing your money to make sure it lasts?
If you want to learn more about money management and smart business practices, we can help.
Check out the business section of our site today. You’ll find all kinds of informative articles here that will help you become a business whiz in no time!