Great ideas mean very little until someone is willing to work on them. If you have a business idea that you think can be a huge success, you should probably consider licensing it to an existing company or starting your own business. It doesn’t matter whether you want to provide a service or manufacture a product, you will require a considerable amount of money to begin with. Funding is required for many different reasons, especially for a start-up. You will need to set up an office, hire employees, purchase adequate machinery for production, and most importantly, buy raw material and packaging items.
Your business could be seriously affected if you don’t have enough money to sustain operations, which is important, especially when considering that most small businesses don’t make a true profit for the first five years. Most small business owners generally take out loans from banks and look for alternative sources of finance to fund their business. However, securing a big loan for an unproven concept in this economy seems like a dream to most people. Banks will obviously want assurance that the money will be returned on time, with the stipulated amount of interest as well.
Apart from traditional banks, here are a few sources of financing that you should check out.
Small Business Loans from Private Funding Companies
There are a number of private funding companies that currently offer small business loans to consumers. Companies such as www.maxfunding.com.au offer loans to many small business owners across Australia. Taking a loan from a private lender is very different than applying at a bank. First of all, private lenders don’t take two to three weeks to reach a decision. A decision will be made on your application within five minutes or less, whereas banks can take up to two weeks to reach a conclusion.
Furthermore, these companies also offer same day funding. As soon as your application is accepted, it will only be a matter of a few hours before the money is transferred to your bank account. Even people who have bad credit scores are considered for such loans, making it a viable option for most business owners. Those who are starting a new business are also taken into consideration, making it an excellent choice for those who want a quick injection of cash to fund new orders.
Taking out a mortgage loan is another way to fund your business. However, before you apply for a mortgage loan, you need to think long and hard about the decision. Most entrepreneurs often get emotional about their businesses and think that they can make the business succeed no matter what. If you are taking out a mortgage loan, you must remember that you are essentially putting your house on the line. If your business fails and you are unable to pay back the loan, the bank will seize your property. Draw up some financial plans to determine the minimum amount of sales you will need to make each month to pay off the mortgage loan within a stipulated amount of time. Mortgage loans are payable in the long-term scope, and you can also apply for a bigger amount depending upon your requirements. If you want to apply for a mortgage loan, you should first talk to a mortgage broker.