How can I get money to start my own business? Here are 3 ways to get the money you need.

Finding financing is one of the most difficult aspects of starting a business. Lenders and Investors require that you meet certain criteria. They will be your first sales pitch for business. You should not ask them “How do I get money to start my business?” Prepare to explain to them all the reasons you should be able to borrow money to start your business.

Before you ask for financing, it is important to determine what type of financing you require or are eligible for. These are the three main types of financing available:

Government Financing

Check with your local government agencies and departments that offer financing. Government financing comes in many forms, including loans, grants, and contributions. It may be difficult to get government funding and may not be available. It is worth considering, just in case your company qualifies.

Private Sector Financing

Private Sector Financing lends money based on risk and reward. They will review your business plan to determine if it is suitable for the type of lending they offer. Also, what will the return on investment be? Does your business model meet the requirements of their lending program? Are you able to repay the loan on the agreed terms? Is your business profitable? All criteria for this type of financing must be met.

Personal Assets

Many investors and lenders require that the entrepreneur use their personal assets to help them start the business. They want to see that your personal stake is in the success of your business. They will often request a security to your personal assets if you don’t have enough money to invest.

They would consider personal assets as collateral: savings, home equity and stocks. Mutual funds, registered savings funds, cars and personal property that could easily be sold.

Once you know what type of financing you might qualify for, your sales pitch and business plan can be tailored towards the lender or investor criteria. You should also evaluate your business plan. Are the financial rewards worth taking on?

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