Creative Financing Options for Small Business
64Its hard enough finding a good business opportunity on the Internet, and sometimes it's even harder to put one you find into action. Once you have a battle plan its time to get outside of the box when it comes to financing it.
Getting Started
There is a wealth of business opportunities on the Web. Some of them are in the form of network marketing, (also known as MLM), while others are affiliate opportunities. Then there's the option one has of forming their own small business through selling products or services online. Either way, when one partakes in Internet business opportunities, they're going to need a way to finance their enterprise. This is because even if a small business opportunity is free, there are still expenses associated with marketing it. Fortunately, through creative financing, several alternatives are available for funding a business without having to worry about the nuances of a small business loan. These creative financing alternatives include: credit cards, business cash advances and home equity loans.
Suze Orman Likes Credit Cards
Credit cards are a widely accessible funding option for small businesses. There are even credit cards available specifically for businesses, though you will usually need to have a business license to acquire them. This can be a problem for those utilizing business opportunities that do not require licensing.
However I would always recommend you set up a business correctly, so you can sell it at the appropriate time. Getting a license, getting a bank account and possible a sales tax license, all make you legit and a desirable business partner.
It is much easier to go the legitimate route then trying to use your personal credit card and then convert to a business credit card. This creates a huge headache at tax time.
Cash Advances
Next, there are business cash advances. This is useful for small businesses that are licensed and accept credit card transactions. What happens is the company issuing the business cash advance purchases a portion of your projected credit card sales. Credit checks and business plans are not required. Payment is made from a percentage of sales that are made. It's a small sacrifice to get tens, hundreds or even millions of dollars upfront. The only downside is that a small business will need to acquire a small amount of success before they can qualify for the advance. Most companies are looking for a small business to earn at least $2,500 a month in credit card sales before they will consider taking the risk. Additionally, the small business must be a licensed enterprise, and not a business opportunity scheme.
My Favorite Solution
Finally, there is the option of getting a home equity loan. Like credit cards home equity loans can be used for personal purchases. And unlike business cash advances, home equity loans can be used for both small businesses and business opportunities. Best of all, home equity loans can offer very large amounts of money. It may not be as large as a business cash advance, but it is still more than enough to handle marketing expenses, especially if one is utilizing a free business opportunity. However, entrepreneurs will need to have good credit. If they don't they can consider looking into subprime refinancing mortgages, though these can be extremely hard to find. I would emphasize keeping the entire balance of your home equity for business. Mixing balances from personal to business is another headache at tax time. If you use the equity line entirely for the business, you will be better off when it comes to keeping records.
Paypal for Small Home Based Business
If you have a Paypal account or accept Paypal, you will have access to a Paypal equity account. The way it works is Paypal will give you some credit ($2500 to start) for you to use for an online purchase. You have to make the purchase online for it to work. However it does work very well and can help you manage some short term money movement. Each time you use it and pay it back, they increase your limit. When I buy from my online vendors, this can be very handy. If I know I can turn my purchase over within a month, this works even better. If you choose to make smaller payments throughout the year, this is an option as well.
Don't forget to Incorporate these costs.
It is easy to forget about incorporating help into your new venture. Most people want to operate their business "on the thin" and do everything themselves. This is ok in the beginning, but it lends itself to burn out. You have to do everything, and becasue of that, you end up doing some things poorly. Good planning would incorporate outsourcing certain tasks like web design, SEO work and your marketing plan. Plan to do some major planning in these areas and you will not be handcuffed to your new business. This is especially true if you still plan to work a regular job.
Conclusion
In conclusion, through credit cards, business cash advances, Paypal and home equity loans, entrepreneurs can easily fund their small businesses or business opportunities without worrying about any extra hassles. In fact, these venues are so useful, entrepreneurs may never need to worry about acquiring business loans, grants or any other financing option that is harder to get.
Thinking outside of the box (not mine)
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Blanche Scharf says:
2 years ago
This is quite an informative article. I now see Paypal in a whole new light. Thanks again for some good advice.