Starting a Business
Faced with the current economic issues, it can be more than difficult to find the necessary funding for a startup business.
Before reaching elsewhere, entrepreneurs
should look to themselves as a the first place to cut expenses, according to an article written by Tamara Monosoff for Entreprenuer magazine. Cut back on personal, non-essential expenses and look into a personal loan. If available to you, consider borrowing money from family and friends, though be sure to carefully lay out the agreement terms, should your business not boom quite as quickly as you had hoped.
Before borrowing any type of loan, however, it is wise to build a cash flow model that will help you see whether or not your company will be able to service your debt.
"This model will show your projected monthly cash position so you can see any potential shortfalls and plan ahead for how to meet them, whether it’s by borrowing or reducing expenses, " Don Sadler wrote in an article on All Business.
If you do decide to borrow, examine your options. One newer type of loan available for young companies is a microloan, which generally provides between $5,000 and $50,000 to borrowers and is more lenient on its criteria. Other options include factoring and angel investors.
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