We are all in the middle of the age of technology. Everywhere that you look people have some type of mobile device in their pockets, hands, or in front of their faces. This may make you think that running a business from a brick-and-mortar location is as outdated as a dial-up internet connection. If this is the way that you are thinking, you would be absolutely correct.
Most consumers today prefer to conduct all their business transactions through online platforms and stores. It is easier, more convenient, and allows them to do it from anywhere in the world, at any time of day. What this means to you is that starting a home-based business could be a very successful adventure at this time in history.
The problem is, though, that lenders have less options available to you if you are running a home-based operation. Going through a traditional lender may seem to be the only option available, and it is definitely a viable one, but you do have some more ways that you can get the capital that you need to get your business going. Let us take a look at a few and you can decide from there.
Friends and Family Loan
This is one of the best options available to you. If you have any friends, or family members, that have some cash laying around you can ask them to help you finance your home-based business. Even though they know you, and hopefully support your ideas, you should approach them with information in hand. A good business plan, some projections, and how much money you stand to make once everything is up and running. Do not assume that they will just hand over the money because of who you are.
Business Line of Credit
Ask yourself “how do business loans work?” and approach it the same way. In theory, opening a line of credit with a company that you buy supplies and materials from is like getting a business loan, except that you only use what you need to use. With a business loan you will be charged interest on the entire amount that you receive. A line of credit will only charge you interest on how much you have charged. Think of it as a way to make payments on the goods that you need, without having to fork over all the money in one shot.
Business Credit Cards
Many times, business credit cards are easier to get than a business loan, and they can offer you the means to get your home-based business up and running. It is also a way to increase your business credit history and score, which can help you get a business loan later down the road, if you need one. Just keep in mind that when using credit cards, you should never charge over 30% of the limits to decrease the impact that they have on your credit, and always pay them off every month to avoid the excess interest fees that come attached to them.
Traditional Business Loans
If all else fails you can apply for a home-based business loan through a traditional lender, or one of the online companies that specialize in them. Either way that you choose to go, just make sure that you are prepared before applying. Have your credit score as high as possible. Your credit history should be impeccable, and your finances need to be in order.
Final Thoughts
When you are trying to get a loan to get your home-based business off the ground you have numerous options. A lot of it depends on how much you need, and how good your credit has been up to this point. If you do opt for a traditional loan, be sure to use an online comparison platform, like iSelect, and pick the offer that best suits your needs, and gives you the best rates.
