As a business owner, you are responsible for making sure that payroll, rent and other expenses are met in a timely manner. Therefore, it is important that you know ahead of time where the money to pay these bills will come from. Fortunately, there are many sources of capital that you can choose from to keep your company running smoothly.
Do You Have Any Savings?
Business owners like Jim Gray MD Mississippi, or fellow business owners throughout the country, may be able to fund their companies using money in a savings account. There are many good reasons to rely on personal savings to pay business expenses as opposed to asking others for money. First, you won’t have to pay interest on money that already belongs to you, and there will be no need to submit to a credit check to gain access to it.
In addition, you are less likely to be reckless with your own money, which means that you will have a plan for each dollar that is spent. Finally, there is no need to give up controlling shares of your company if you choose to use personal savings to fund your company.
Angel Investors Can Help
An angel investor is someone who is as interested in your company’s mission as in its ability to make money. For example, someone like Jim Gray MD Mississippi may be interested in a company that aims to make healthcare more accessible to residents of Mississippi.
While an angel investor will want to see a return on his or her investment, such an individual generally doesn’t expect to realize that return for many years to come. In addition to offering financial assistance, an angel investor may be willing to offer his or her business expertise or other guidance to your business.
Friends and Family Members Are Still an Option
It is possible to strain relationships with friends and family members if they don’t get their money back. However, your best friend, parents and others who are close to you are likely going to be your biggest supporters. Therefore, they may be the most likely to provide a loan or buy an equity stake in your business.
If you do borrow from those closest to you, make sure to create a formal loan agreement. Doing so can provide you with greater motivation to make payments on a regular basis. It can also be important from a tax standpoint to create formal loan documents.
Take a Loan in Your Own Name
It is unlikely that you will be able to borrow money in your company’s name until it has been profitable for several years. However, you could still opt to get a personal loan or a credit card in your own name that could be used for business purposes. Cash back or other credit card perks could be cashed in to provide benefits for your employees such as health care.
This may allow them to see medical professionals such as Jim Gray MD Mississippi whenever they need to. Personal loans can be secured by collateral such as a home or a car and securing a loan with collateral can help to reduce its interest rate.
Cash Advances Could be Available
After a year or two in business, your business could be approved for a merchant account. A merchant account allows the company to accept debit and credit cards at a cash register or through an online payment portal. Assuming that the company has sufficient cash flow and regular credit card receipts, it may be possible to obtain a merchant cash advance. The amount of the advance will be determined by your average sales over a predetermined number of months prior to submitting an application.
Starting a business can be one of the most rewarding experiences of your life. By partnering with the right investor or lender, you may be able to reduce the stress that comes with funding it. Ultimately, you will be able to spend more time creating a great product or service and less time looking for ways to keep the lights on.
