You have decided on the type of business venture you want to start, so the next step to success is deciding where the money to fund it will come from. Where do you start?
The number one form of financing for most business startups is self-financing. When you apply to other financing sources such as venture capitalists, the government or bankers, they will want to know exactly how much of your own money you are investing into the venture. If you don’t have enough faith in your venture to put your own money on the line, why would anyone else want to risk theirs?
Do an Inventory of Your Assets
The best way to start self-financing is by doing an inventory of your assets. It is possible you could uncover resources you didn’t know you had. These assets include:
Real estate equity
Using Assets for Funding
Once you have an inventory of your assets, it’s time to explore the best options on how to use them to finance your start-up. You may decide to sell some of the assets for cash or use them as collateral.
For example, Home owners may consider getting a home equity loan. The bank will either provide a lump sum or extend a line of credit based on the equity of your home. A home equity loan could be a substantial line of credit, depending on the value of your home. Home equity loans have relatively low interest rates, and all interest paid on the loan, up to $100,000, is tax-deductible.
Most new entrepreneurs will generally have more assets than they realize. The more you invest, the easier it will be to acquire capital from other sources.