Family businesses can be hard to start up, especially in today’s economy that is still relatively shaky. There was a time when a small business owner only had to have relatively good credit and a working relationship with a bank to secure a loan, but things have gotten harder for startups.
Thankfully, there are a number of alternative ways to fund a startup that does not require a bank’s stamp of approval.
The Grant Option
There is no doubt that Americans are hungry to become business owners. At the moment, over 20 million Americans own a startup and are attempting to make their business a success.
One might imagine that banks are more than happy to help enthusiastic Americans attempting to achieve the dream, but that does not seem to be the case, which is forcing some to turn to things like grants.
Small businesses have access to many grants, like the FedEx Small Business Grant and the Rural Business Enterprise Grant. Keep in mind that some of these grants are region-specific, so it would be a good idea to consult local government officials to see what is available in your region and what you may qualify for.
Social Platform Magic
More family startups are beginning to see that they can use different social media platforms to gather investors who might be interested in their company. Small businesses usually develop the product or service, try to present it in an inventive way to gather attention, and then show it off on these crowdfunding platforms.
Investors, even smaller investors, look at that video and give to the company based on the power of concept and the business plan. There is no need to worry about banks approving a loan, meaning that family business startups do not have to go through the rigorous process of getting the loan.
These investors are usually interested in the idea and are willing to risk their money for the business; granted, most of the investments are small, but that money adds up.
Self-Fund in Interesting Ways
Those who do not need much money for the startup can definitely gather financial support from family members and friends. Some people should even consider extreme savings tactics, and take on a second job to make enough cash to fund this endeavor without additional help. This may work if you do not need a large sum because earning a large sum of cash can be time-consuming.
If entrepreneurs need large sums of cash, they have a few options. One of the alternative options you have is sometimes overlooked. Those who own a life insurance policy or have a family member who owns one may sell that policy. There are life settlement brokers out there who will pay top dollar to take that policy off your hands and give you a big check for it.
Of course, it is wise to talk to a few brokers to make sure you are getting the very best deal for the policy. It is important to make sure you or your family member is truly ready to sell his or her policy before making this decision.
Hopefully, some of this information makes it easier to finance your family’s business endeavor. Remember that you are taking a risk, so make sure that you prepare for losses by keeping a relatively strong saving accounts, and make sure you have the insurances needed to run a business.