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    Small Business Start Up Financing Ideas

    So, you have the perfect idea for a small business! That's great! There's just one problem? how are you going to fund this business? There are several funding options for a well planned small business. Some will be more to you than others. Sometimes termed "venture capital," these ideas will help you gain the money you need to start and grow a successful small business.

    The most common type of start up funding is a bank loan. Most banks and other financial institutions have a form of small business loan that they offer to potential businesses on a regular basis. In order to qualify for this type of loan, you have to have a good business plan that shows that you will be able to make the minimum payments on your loan each month. With a bank loan, you will be required to make monthly payments on time each and every month until the loan is paid off. These payments include interest and principle. In order to qualify for a bank loan, you must have a decent credit rating.

    Another avenue to try to get the start up financing you need is the Small Business Administration. The Small Business Administration helps you learn how to apply for loans. They do not provide the loans, but they can point you in the right direction and help you prepare to present your business to potential lenders. They also will teach you the requirements for being approved for business financing.

    Many people looking to start a business that are unsuccessful in gaining a loan from a bank or other financial institution turn to their family and friends. If you know someone who has money to invest, and you are able to present them with a repayment plan for your new business, you may be able to gain the money you need for your new business this way. However, you need to treat this as a loan in the same way you would a loan from a bank. Treating the loan from friends or family lightly can cause a problem in the relationship you have with the lender. Draw up a contract and make a minimum monthly payment amount that you will stick to!

    The final way to seek start up financing for your small business idea is through a traditional venture capital firm, or an individual known as an angel investor. These types of investors will give you the capital you need in return for a partial ownership in the company or business you are starting. They do not typically invest in the average small business, but are rather looking for a business that has the potential to become the next hot item or service. If, however, you have a great technology idea, then a venture capitalist or angel investor may work for you.

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