So last time (it’s been a while, I’m a slack blogger!) we talked about the financing of your business and how to figure out what it will cost. Today I’m going to go through some financing options for running your business and tell you about my experiences with each.

Saved up money

This is your easiest option. If you’re sitting on a bit of a nest egg, using this money to fuel your start up will be the easiest, less stressful method available. No one likes having to spend what they’ve worked hard to save, but this method will save you money (no interest), and if all goes well, you’ll get it back!

Bank Loans

If spending your savings was the easiest, this is one of the most difficult in my experience. Banks, as you know, have money that they will consider loaning businesses based on the amount of risk associated, potential for repayment, and your credit history. However, even with Small Business Association involvement, the current economic climate is not good for people trying to get money. If you have a good solid credit history, low debt/income ratio, and plan on continuing to work full time while starting your business, you shouldn’t have much issue.

Example of confusing though: I have no debt (other than our mortgage), excellent credit, and was going to quit my job. However, since I am 25, my financial history is not long enough.

Grants

Grants are money gifts provided for by large corporations or foundations to promote a certain ideal or cause. The grant application process is a lengthy one and can often take a long time to hear back on. However the upside is that this funding comes at no loss or risk to you. You have a better chance (from my observations) of receiving grant monies if you are a not for profit.

Credit Cards

This to me is the last resort. Credit card interest is high, it’s not cash, and rates can change. However, if like me, you have no other options, this might be worth looking into. Just make sure you are never late on a payment and try to pay off more than the minimum each month. My father (yay for dads), is the one helping me on this. I’m on one of his credit cards as a user since with his credit history (sigh), he can get a higher credit limit. It’s my responsibility to pay on the bill, but my dad is letting me use the advantage of his history with the companies so the interest rate is lower.

That’s a brief run down on ways you can finance your start up. If you know of other ways, or have some experience you’d like to add, feel free to comment!