Seven Alternative Sources of Capital for Setting Up a Business
Borrowing from banks is every small entrepreneur’s nightmare. One gets turned down for bank loans for a variety of reasons, including lack of assets, collateral and business experience. Don’t despair, however. There are several common types of alternative sources of capital for setting up a business available to young companies.
Savings and Investments
The first source you should consider is your own savings and investments. One disadvantage though of self-financing is that if things did not turn out the way you want them to be it will be your money that goes down with the ship.
Angel Investors
Angel investors are affluent individuals who provide capital for a business start-up, usually in exchange for ownership equity. These individuals are looking for a higher rate of return than would be given by more traditional investments (typically 25% or more). Read more
Personal Loans With Bad Credit – Any Options?
Christmas is around the corner, wild spending defies every logic and bills are being pushed forward, next years resolutions are to cut down on unnecessary goods and to be wise with money.
You fake a smile and try to be merry, deep down you only know how you are struggling to make meets end.
If things were not bad enough, your brother has asked you to lend him some money, so what do you do in such a situation.
Bad credit is a causing you concern because you were just about to apply for a loan.
If you have been a good customer for a long period and the banks have accounts of this, then instead of personal loans with bad credit you might try to look for an overdraft facility or an extension on your existing loan.
How bad is bad credit? Read more
Credit Crunch – Not a Credit Freeze
photo credit: the_toe_stubber
First of all, it’s a credit crunch not a credit freeze!
Sure, banks are more cautious about their lending, but when were they not? The reality is that the majority of banks are lending, and to remain profitable they will continue to lend to small business owners. Those that understand the situation are acting now!
“Buy low, sell high”
With the current economic low, it is the best time to get financing at a low rate, with lower-than-ever requirements. Big banks like Citi and HSBC are making their decisions based on business credit scores, not personal fico’s.
Personal guarantee is a promise made by an entrepreneur to personally repay company debts if the business defaults. It is a way for banks to protect themselves, while reflecting the seriousness of the business owner to repay debts. Without a personal guarantee, they are thought to not believe in their business and are high risk. Small business owners don’t want to provide a personal guarantee if possible. Even if they are diligent about repaying debts, some unforeseen catastrophe may happen preventing a loan payment. Then the bank seizes personal assets. Read more
Strike While the Iron is Hot – Using the Recession to Your Advantage
photo credit: XirannisX en Off
These last few weeks of our economic downturn got everyone wound up. From business owners to CEO’s and back to the consumers – everyone is in a panic about the recession and the bailout plans. But what is a recession, really? How are the bailouts impacting your life?
As consumers we are all hurt. The price increases on all goods and services for which President-Elect Obama is preparing already, will be upon us soon.
However, as small business owners should we think of this as a gain or a loss? Read more
The Role of Scholarship, Grant, and Loans to College Financial Aid
Some students are unable to attend college courses because of insufficient financial capability and economic limitation. Others are not informed about the types of programs available to help them become one of the eligible students. The College Financial Aid (CFA) has been continually improving its assistance coverage to help in educational development. They now offer full coverage of expenses to students with financial disability.
CFA is open to assisting students plan their financials for higher education. They give counseling to confused applicants, usually encouraging them to continue their studies despite monetary problems. They guide students in their endeavor to finish school and get a better job afterwards. Applying for financial aid in CFA is easy. Learn more about scholarships, loans and grants below.
Loans
The college education loan is borrowed money to temporarily cover students’ expenses. It is paid back with interest. Read more
Peer 2 Peer Lending – Cutting Out The Middle Man
In the past getting a loan used to be a pretty intimidating process, getting dressed in your Sunday best, looking your best and venturing into town to the bank for a date with the Bank Manager. Once there you used to have to throw yourself at the mercy of the manager and plead for them to lend you money, getting declined for a loan was often a demoralising and embarrassing process.
These days applying for a loan is much more stress-free with the decision on whether you get given the money being based more on details such as your income, credit report and other factors, but still people can get turned down for reasons other than a poor credit record. In light of the recent credit crunch many banks are being more cautious about whom they lend money to and in some cases have ceased offering unsecured loans. Read more
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