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If you are starting a new business, there are certain items and services that you need to invest in before you can get yourself properly up and running. Of course, this means that you will need to have the money available to make these purchases, which can be a problem for some new business owners. If you don’t have the capital available upfront, you may struggle to get everything set up. This means that you have to look at ways in which you can fund the cost of essential goods and services for your startup business.
While getting a loan for your business is one of the options available, many people these days have low credit scores. This can have a big impact on your ability to get a loan. Fortunately, there are business loans for bad credit available from certain banks and lenders. So, if your credit isn’t great there is still hope.
What other means of funding can you try?
In the event that you are struggling to get a business loan to fund essential initial costs for your business, there are some other options that you could try. Some of the costs you may need to cover include buying furniture and equipment for your business, buying stock, setting up essential services such as utilities and internet, or even having money to make payments to employees. You also need to purchase supplies such as paper and stationery and make a range of other upfront payments. So, how can you fund all this without a business loan? Let’s take a look at some of the options:
Borrowing against your home equity: If you own your own home and you have some equity available, you may be able to borrow against this. Home equity loans are more readily available to those with bad credit because there is collateral involved. However, the risk is that if you do not keep on top of repayments you could end up losing your home.
Asking family members to help: If you think that you will start making money pretty fast, you could ask family members to help with initial funding for essential goods and service. Once you are up and running and the business is making money, you can repay them and perhaps even offer a little interest by way of an incentive.
Apply for a credit card: If you don’t think you will be able to get a business loan, it may be worth looking for a credit card to make your purchases. However, do be mindful of the high rates of interest involved if you do not repay the balance in the interest free period – particularly in terms of credit cards for those with damaged credit.
Your circumstances and individual situation will determine the various solutions that may be open to you. If you have good credit, you will have more options available. It may even be worth checking to see whether you are entitled to any funding or grants from the government.
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