Available sources of financing
What are the classic financing options for a start-up business?
Classing financing options are those closest to home:
- You. The initial funds for all start-ups comes from the founders. Other than any cash and other assets you can invest, home equity loans are among the most frequently used to fund a new business.
- Family and friends. Since they know you, they likely want to see you succeed. Show them your business plan, and convince them that your concept is viable. They may simply lend you money, or they may prefer to hold an equity stake in your business. Either way, put the loan terms in writing, and include the interest rate and payment terms. Treat the loan agreement as you would that from a bank; just because it's family or friends doesn't mean their money is less valuable.
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