business owners find this to be their biggest obstacle they have to overcome.
While there are a variety of sources available for financial assistance
most of them will require some amount of collateral. Usually this will
need to be in the form of real estate although it does not neccesarily
have to be equivelent to the amount of money you are trying to borrow
as long as you have good credit.
If you have good credit but little collateral you may want to also look
for government programs that will match your investment amount. This usually
is available in the form of a grant that is offered as an incentive for
businesses to locate in areas that are need of economic recovery.
Signature Credit is also used by many business owners to provide startup
funding and to cover equipment purchases. Signature Credit is basically
any credit for which you need not provide any collateral, as is often
the case with credit cards. Prospective business owners simply liquidate
lines of credit in the form of cash advances and use the remaining credit
for purchases. While this can be a ready source of funding it comes at
a high interest rate and puts their personal credit history at risk.
Equipment leasing can also aid in defraying the cost of starting a new
business. A person with good credit can usually lease $10000 worth of
equipemnt for as little as $320 per month.
Grants are sometimes available through the Federal Government but not
as readily as many late night infomercials would have you beleive and,
while many minorities do have a better chance to qualify for most of these
grants, there are not grants available to individuals based solely on
a minority status.
Grants are often available from the government to develop the economic,
social or educational goals of the current or previous administrations.
These funds are generally targeted towards specific industries that the
government feels needs their additional support such as child care, farming,
technology, medical care etc.
Grants are also sometimes available from the goverment to promote the
economy in particularly depressedf areas such as the Empowerment Zones
of the 1990’s. Many grants are also available to help Americans
continue their education.
Grants are not generally available as ready sources of income for starting
a business because they require a fair amount of research and preperation.
The primary advanage of a grant is that the money often does not need
to be repaid. To research what grants are available follow this link.
These are just a few of the options that may be available to business
owners. We have provided links to some sources on our home
page. Because the needs and resources are different for every situation
each business owner will need to decide which options are best for them.