Five Innovative Ideas for Getting a Small Business Start up Loan

A Home Business Article Contributed by Abe Gardea

Ideas for a Small Business Start up Loan

Going to a bank isn't always an option for a small business start up loan. In fact, if you're looking to borrow under $50,000 it's almost impossible. But there are other, more inventive ways to get your capital. Browse over the ideas below and see if you can't find your funding today.

Small business start up loan idea # 1

If you own a home with equity, you may already have everything you need. Let's say your home is worth $100,000 and the balance on your loan is $40,000. That means you have $60,000 in equity and you can take out a loan against it. However, it's important to remember that once your loan is in effect, you will be responsible for the monthly payments, and that could prove to be too much for your fledgling business.

Small business start up loan idea # 2

If you have anything of value, you could sell it for cash. This idea is great for a business that only needs a little money to get started. For instance, do you have a piece of land, expensive jewelry, a boat or an extra car? If so, you have to decide what's more important; the item or the money that could be used for your new venture.

Small business start up loan idea # 3

Friends and family are one of the biggest resources for small business start up loans. But it's important to treat these potential investors just as you would a professional one. Put everything in writing, and be sure to inform them about all of the risks before taking their money. A good rule of thumb should be to protect your relationship above all costs, and do everything possible to prevent a fall-out.

Small business start up loan idea # 4

If you're only looking to borrow a small amount, you might consider financing your business with your credit cards. At first glance, this may sound foolish because of the high-interest rates. Granted, it's probably not the smartest way to go, but if it's the only opportunity you've got to get started, it just might work. Just think, if your loan payments are only $100 per month making the minimum payment on your credit cards, that just may give your business the time needed to truly take off.

And then as your business becomes more successful and starts making a profit, you can increase the payments and get the balance paid off quicker.

Small business start up loan idea # 5

If you have investments, such as an IRA plan, you can borrow against it, interest free for a limited period of time. For example, if you borrowed from you IRA, you would have a 60 day interest free loan. If you had a few IRA plans, you could borrow from one and repay with another and so on until your business could repay the loan. The potential downfall to this is that if you are even one day late, you will have to pay a 10 percent early withdrawal fee and the loan you took out will become subject to taxes.