Financing New Venture Unit-6 There are 18 Ways to

Transcript:Financing New Venture Unit-6 There are 18 Ways to:
Financing New Venture Unit-6 There are 18 Ways to Finance Your Latest Business Venture 1. Bank loan Banks have gotten stricter with loans. But, if you have a solid credit score (usually above 650), have assets, and you are in good shape with your taxes, then you shouldn't have a problem obtaining a bank loan. Banks like Wells Fargo, Huntington National Bank, J.P. Morgan Chase, and U.S. Bank National Association are the most active when it comes to issuing small business loans. Ways to Finance Your Latest Business Venture 2. Online lending/peer-to-peer If you can't obtain a traditional bank loan, there are online lending options like Kabbage, Foundation, and OnDeck. You can be approved for a loan up to $500,000, it takes only about an hour to complete, and funds are available within a business day. There are also peer-to-peer lenders through Lending Club, Prosper, and Funding Circle. The interest rate may be higher, but you'd be dealing directly with the lender, so the criteria is not as stringent as traditional brick-and-mortar banks. Ways to Finance Your Latest Business Venture 3. Credit cards There are definitely pros and cons when financing your business using a credit card. For starters, it doesn't take long to get approved for a business credit card, and minimum payments are fairly low. If you want to get your business up and running quickly, and don't have much money coming in, credit cards can be an attractive option. On the downside, using plastic can be risky if you fall behind on a payment. Even missing just one payment could do serious damage to your credit score. And let's not even talk about those interest rates. If you make only the minimum payment, you could have to carry this debt for years. Ways to Finance Your Latest Business Venture 4. Angel investors For early-stage startups, angel investors are a go-to-source of financing. Angel investors typically invest $10K -$1M and expect a 20- to 25-percent return. If you want to win over an angel, make sure you're knowledgeable, succinct, and have an exit plan in place. Ways to Finance Your Latest Business Venture 5. Venture capitalists If you're already beyond the startup phase and have revenue flowing in, but still need money to grow, there's no better option than a venture capitalist. VCs will fund anywhere from several million to several billion dollars. Make sure you do your