The 3 F’s in Start-up Business Loans
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Start-up business loans are difficult to get since there are few banks and lending institutions that will risk their money to fund your business venture. It is essential to keep in mind that business loans are different from personal loans. Therefore, banks do not want to risk their money on something that requires too much risk. That’s why in applying for a start-up business loan, you will have to work twice as hard to come up with a creative business plan that will catch their attention to convince them to let you borrow the money.
Most start-up business fail in the first few years of operations and you are in great risk if you want to apply for a start-up business loan. Above all, you should make sure that you are building a good credit history for your business so you can borrow money when the need arises and also to manage your own personal risk.
Here are the 3 F’s in outsourcing funds for your start-up business:
These people trust you and you also give your trust to them. If you are determined to solicit funds from friends, make sure that you are prepared to give an informative presentation. Give value to them because they are holding on to your claims that your business venture is worth investing in. So if they choose to give the loan, give them monthly updates and do not ignore their question if they have any.
All of us have those family members that are well of. You can ask for their help if you need to and there is a possibility that they will be at least open-minded in hearing your business plan. Be creative in presenting your ideas and follow through on the agreements and contracts that you have made with them. They are holding on to your word so do your part in proving to them that your business venture is a good one.
They are not exactly fools, but asking the public for help is another way to fund your business. You can find online funding organizations like Fundly, Indigogo, or etc. to help you fund your business advocacy. Advertising the business to potential venture capitalists or angels can also be a means to get funding.