Pro-Advice:
- Don't quit your day job
- Save every extra penny
- Reduce your spending
- Organize your finances
The Real Question: Where to find other people's money that can be used to start a business ?
Small Business Administration (SBA) loan:
The U.S. Small Business Administration (SBA) helps small businesses obtain funding through different types of loans.
- They back traditional loans made by banks for those that
need a loan to start a business
- An SBA loan reduces the risk for lenders, allowing lenders
to offer loans with lower qualification requirements than traditional funding.
- They can also point you in the right direction to receive professional advice on how to start a business without your own money.
Alternative Small Business Loans:
While most banks are hesitant to offer a grant to start a business that is not established, some alternative lenders specialize in startup companies. An alternative small business loan may help you address your issue of how to raise capital for a startup.
- They approve customers for a loan to start a business when
traditional banks would turn them away.
- Sometimes, you can get approved the same day and get instant
access to the loan proceeds.
Purchase Order Financing:
When you have a purchase order from a customer but need
money to fulfill it, you can use purchase order financing to get the money.
- These lenders provide a portion of the money upfront in
exchange for getting paid from the customer at a later date.
- This type of financing can be expensive, but it can be
useful to grow your business.
Accounts Receivable Financing:
Accounts receivable financing is another expensive financing
option. When you have delivered for a client and are waiting for payment on
your invoice.
- The factoring company pays you today and gets paid from the
client at a later date.
Friends and Family:
Family and friends can be a good way to get a loan to start
a business. They know you and understand the skills and experience you have to
make a successful business.
- Terms and repayment can be messy with these types of loans,
so it is best to create professional loan documents as if you were borrowing
from a bank.
- That way everyone is on the same page with the terms of the
loan.
Angel investors:
Angel investors are typically retired industry veterans that
want to invest their time, money, and experience into helping individuals with
the steps to start a small business.
- In exchange for partial ownership of your company they'll
provide the startup capital that you need to get your business up and running.
- Additionally, they may be available to answer questions and
introduce you to customers, suppliers, and other contacts to accelerate the
growth of your business.
Credit Card 0% APR Offers:
One of the best steps to start a small business is by using
0% APR offers from a new credit card.
- Limited-time promotions allow you to make purchases on your
card today and have up to one year (or longer) to repay them without owing any
interest charges.
- Keep in mind that you must make minimum payments every
month, otherwise, your promotional offer could expire early.
How to Be Taken Seriously and The Steps to Start a Small Business
Here are the top tips for starting a business:
Business structure:
- You'll need to decide what type of business structure you'll
have.
- Sole proprietorship, partnership, limited liability company
(LLC), corporation, or something else
- A sole proprietorship is generally the cheapest and easier
to get started. You can change your business structure in the future as
business needs evolve.
Open a business banking account:
- This is where you'll deposit money received from customers
and make payments related to the business.
- As balances increase, you can add a business savings account
to earn interest and build a cash cushion.
Apply for a business credit card:
- You'll make accounting easier if you're able to track your
expenses with a business credit card.
- This makes it easier to separate business and personal
purchases.
Launch a business website:
- The website makes it easier for customers to find you and
understand what products and services you offer.
- If you have e-commerce functionality, you can even generate
revenue outside of business hours.
Create a business email address:
- Having a professional email address keeps communications separate from your personal email and provides more legitimacy to your business. An email from a gmail address is not super professional and more likely to get caught in spam filters.
Business License:
- In some cities, you must have a business license to operate
your business. Contact your City Hall to ask about local rules.
Requirements to Start a Business
Apply for an Employer Identification Number (EIN):
- EIN number establishes your business separately from your
Social Security number
- Doesn't matter if you never have another employee
- It creates your business profile
- Banks, investors, grants and other entities helping with the
first steps to start a small business use this to identify your business. You
can then work with them without having to share your Social Security number
- The IRS provides a free tool that will afford you an EIN number quickly and easily
Additional requirements to start a business vary. However,
if you're not planning on being a professional butterfly therapist you need to
comply with legal obligations relating to business structure, employment and
taxation.
This article will inform you about all the legal requirements for starting a business.
Conclusion
Torro offers business advice and guidance and up to $125,000 in startup capital to cover:
- Startup costs
- Critical purchases
- Buying a business or franchise
- Necessary expenses along the way
- Quick and requires limited asset verification
- Little to no paperwork
