Looking at the current scenario one can find multiple business start ups coming every day and almost 50% of them are taking the e-commerce route. Well in these kind of businesses start up costs are really not that high and one can always think of investing from their own sources to get on with the business. However, businesses tend to grow really fast and there will not be much time before you will need to inject fresh funds to take your business further.
It is here that you will have to look for funding from the external sources because your own funds would not be able to assist you. Banks generally demand very high interest rates from the businesses and especially the online business.
The approval procedure and the requirements are often too stringent for the start up businesses and it is common to find that most of the businesses fail to qualify for the loans. Collaterals become a must for these personal loans for bad credit and with high level of risks involved with these businesses, there is little that even the banks can do when it comes to waivers. Fortunately there are alternative sources of business available and that too without too much difficulty that one can find and cling on to seed their businesses.
Get Funds from Friends and Family
If your funding requirements are somewhere in the range of $10000 to $55000 you can consider the option of arranging funds from the friends and family. However, just like when you approach the banks for the funds , in case of this form of funding for you need to approach your lenders, your friends and family with a business plan. The plan should clearly explain the reasons for the funding, the way you are going to use the money or invest it for the business purpose and also the expectations of the business. The investors will definitely like to know about the future of the business, customers, competition, order book and the challenges and the real difficulty faced by them. Another important factor which is important to note here is that any of the lenders will surely like to know about your plans to return their money. It is therefore required that you come up with a fixed plan towards the repayment of the loans that you take.
With your friends and family you should always get into a commitment of taking loans in phases. This will help you save a lot of money on interest if your business plan is such that you will not use the entire loan amount you wish to take in a go but require the funds in instalments.
Contact Angel Investors
If you are in need of funds to the tune of $100,000 or more , you will definitely not be able to get it from the friends and relatives. Angel investors are the new class of investors which comprises of a group of people who are interested in making funding decisions for the businesses which have shown some promise within a span of the first 1-2 years or those who have very strong business ideas, a good team to support the business and the businesses have strong pockets to deal with them.
Getting funds from the businesses is never easy. You need to keep looking for the Angel investors and be ready to present to them your business ideas as and when required. The selection of these investors really needs a lot of research and as a borrower you must look for the investors who have a history of making investments in your sector. However, if you are new then it can be worth convincing lenders who are the first timers in your sector. This will make your approval a bit easier since the investors not being aware of the business intricacies will surely not ask you the questions which the others who are experiencing might.
You can always benefit from the funding from the alternative sources. This is more because you will always have the option of approaching the banks whenever you want. With funding already in your pocket to fuel your requirements you will be in a better position to negotiate with the new lenders you approach.
Whichever form and source of funding you opt for making sure that you understand the complete details of them and never sign any agreement till you are sure of the details therein.