1. 5 Tips to Fund Your Business
Posted on February 7, 2012 by Maya Pillai
Small businesses have proven to be the spine of any economy. According to the report published
by Small Business Administration, for more than a decade, 64% of the new jobs have been
generated by small businesses. In the year 2011, Startup America was launched by the
government to boost the growth of small businesses. Though there’s expert advice available to
start your venture, funding is still an issue with many small business owners.
When the economy is just recovering from a downturn, it is not easy to get funds for your
business. Therefore, before you start your venture, have in place not only a good business plan
but also seek advice from an experienced and successful businessman. One who would be in a
position to give you information regarding the working capital that you need to tide over the first
year of the startup, or until you break-even. We have put together a few points on how to get
funds for your small business.
Tips on Funding your Business
Explore all sources – The best way to fund your business is by using your savings, credit
cards, home equity or insurance policy. If you are funding from your own wallet, you are
© 2011 Apptivo Inc. All rights reserved.

2. not answerable to anyone. However, you should explore other sources before using your
personal money. See if your local bank or the bank with which you do business with is
willing to give you a loan. You can also look into the government schemes such as
Enterprise Finance Guarantee and other regional funds that are available through Small
Business Administration. Ensure that you are getting loans from the right lender, at good
interest rates.
Have business strategies in place – You need to decide whether you want to ask your
friends and family for the funds or seek out investors. Whether it’s investors or
friends/family, whoever is going to fund you, would want to know about your business
and how you plan to make it a success in the next few years. The investors would want a
professional written plan while the people who know you would prefer you talk about
your plan informally over a cup of coffee.
Decide whether you want to take a huge sum from a single investor or small sums
from many people - You need to decide your investment type. Keep in mind that there
will be strings attached to money that has been lent. If it is a loan from an angel investor,
get a small business lawyer to make a legal draft, so you are not in trouble in the future.
However, it is advisable to avoid investors. When your business is doing well, investors
will want to join in. It is wise to borrow small from friends and relatives. If someone gave
you money without wanting anything in return, you may not have to return the money,
but it’s always wise to keep the person in the loop and notify them on how everything is
doing. It’s a great way to show gratitude towards the person.
Deposit money in your account – Bookkeeping is mandatory if your business wants to
succeed. It’s important to keep track and write down the daily expenses. Without fail,
deposit money which comes in through sales at the bank the same or very next day.
When the bank manager sees that you are depositing even the smallest amount regularly,
they will develop a trust in you and your business. This allows you to build a relationship
with the bank manager, hopefully securing you a business loan.
© 2011 Apptivo Inc. All rights reserved.

3. Money saved is money earned – When you know that there is a cash crunch, you should
reduce the expenses by saving money on your small business. Some ideas on saving
money is avoiding prime office space locations and buy reconditioned furniture and
office equipment that are in good condition. Instead of hiring accountants and
consultants, ask one of your close friends or relatives to help you out and pay them a
small wage. Therefore, this will help curb your unwanted expenses.
Applying for a business credit card is another source of funding. Be careful of not overspending
and make sure to pay the minimum amount on time, or else you will be in debt. Credit card debt
will affect your credit scores which in turn, will affect the process of receiving a loan. If
repairing your credit scores is going to take a long time, then no financial institutions will be
ready to invest in your business or you would have to pay a high rate of interest.
If you are prudent with your money, the business will succeed and money will start pouring in.
Flickr image by 401K
© 2011 Apptivo Inc. All rights reserved.