Starting a new business can be a stressful experience, with one of the most challenging aspects being the finances involved. The costs involved in opening your own business can be tremendous, and without proper financial planning, you could find yourself in some hot water. There arevarious options when it comes to financing your company, and learning about these options will help you make the best choice for you and your business.
According to a 2012 study, 79% of small business owners use their credit cards to start or grow their business. Now, this number could have certainly changed all of five years later, but the idea is that lots of individuals use credit cards as a means to fund their personal and business objectives.
The use of business credit cards is certainly a popular option as it not only helps to provide funds but also has a positive effect on the business and the economy as a whole. The bottom line is that more business people are using credit cards these days and that it will continue to grow in the future.
Short term business loans
Short-term business loans, also known as microloans, are typically issued to borrowers who have a less than sparkling credit record or who do not qualify for traditional bank financing. These are great options for those looking to fund their business but are worried about the credit history and how this will affect the outcome of the application. According to statistics, small businesses have enjoyed a significant level of success since obtaining microloans, making it one of the most beneficial options for funding your business.
Of course, if you have managed to save up enough money to start your business, you will not need to approach any lenders. This is the number one business financing option for most people as you will not have to apply for any funding or pay back any loans. This is a great way to get started on your business venture and also ideal if you are unable to qualify for traditional funding from banks or financial institutions.
Successful business owners usually have one thing in common – the ability to plan the financial future of the company. There are plenty more options available, which include approaching relatives, friends or business partners for a loan or tapping into your retirement fund, but the best advice you should follow is to weigh out your options and decided that one that is best.