If you are one of those professionals who likes to do his/her own thing, a 9-to-5 job is not for you. Till about a decade ago, many people with bright ideas of starting a business had to eventually give up their plans only because they had no source of funds.
Small business funding was anyway difficult to find and even if you do find one, the terms under which the banks lend you the money would be quite unfavorable. When you want to start a business the terms of lending will not change for you to enable 100% funding.
It doesn’t work in this manner because most lenders provide loans to the extent of 80-90% of your requirement. As the borrower you are expected to fill in 10-20% of your funding requirement on your own.
What business do you want to start?
Starting a business does not mean you just wake up one fine day and decide to start one. It is a very big decision for whoever decides to start a business and in most if not all cases it is a wage-earner who quits his/her job to take the plunge. In most cases, you would choose the same line of work you are familiar with, i.e. something you have been doing as a wage earner.
In the US, business funding agencies would consider your application for a loan more favorably if they see that your business serves the same market where you operated as a wage earner. That is a reassurance for the lender because in their assessment, knowing what you are doing rather than learning to do it entails much lower risk.
There are some companies that use skip tracing software for faster transactions in case other loan applicants will run away.
Have you done your research on the market?
One of the most important aspects of starting a business is understanding the market you are going to operate in. First, it is the level of demand for your product/service offering and whether it is good enough to sustain your business. If it is the same product/service that you have been dealing with during your tenure of employment, you would be well aware of it.
However, if it happens to be a new product/service that your new business is going to offer, then you need to study the market properly before taking the plunge. Initially, your own savings and efforts will help you start the business but very soon you will need working capital and equipment financing to run your business smoothly.
Have you worked on building a supply chain?
Every business has a supply chain, especially if it is a manufactured/processed product you are selling. Considering that it is a product, you need to make sure that you have partnered suppliers on whom you can rely for timely deliveries. You will invariably find it difficult to balance the cycle of supplies and sales and to deal with that challenge you will need business capital loans.
Since it is difficult for a small business to obtain funds from traditional lenders your best source of funds is obviously alternative lending agencies. They are fast and efficient although the cost of borrowing would be a little costlier, which should not be a problem at all. After all, these are unsecured funds and they won’t even check your credit history. Alternative Funding Group is a trusted source of funds for thousands of small businesses who now don’t worry about their funding requirements anymore.
