When looking for money to start a business, you have plenty of options to check out. Of course, not all of them will pan out, but if you open up your search to as many places as possible, chances are that you will be able to get some funding from somewhere. In this economic climate it can be difficult to secure the money you need, but there is definitely money out there to be had. The key is to having a solid plan that you can present to possible lenders; making them feel as though your idea will succeed goes a long way towards getting them to release the purse strings. I am writing this post from some personal experience of late, as my wife is finishing up her business plan for a small private Montessori School she wants to open here and will soon be presenting it in order to get some funding. Over the course of our discussion about this and in putting together her plan of action, here are the places she is going to look for money, in the order she is going to look.
- Family – Her mother has already said she would loan her some start-up money, interest free, which is a great start. This amount of money will help to buy supplies and furniture for the school.
- Friends – Her old boss from the private school in Los Angeles wants to help out as well, because she remembers when she was starting her own school. I guess she wants to return the karma! This is another great source of funds that comes with no strings attached and no interest.
- Soliciting Donations – Because where we live is such a tight-knit community where everyone hears about everything you do, a new school might be seen as a good thing for wealthy donors to give money to and help create.
- Bank Loans or SBA Loans – This is the next plan of attack, to look for low interest loans from either our local banks here in town or the Small Business Administration. Because we live in such a small town, our banks are solvent and willing to lend money, especially for education programs for our town. So this could be really great for her, to be able to borrow locally.
- Peer to Peer Lending or Credit Cards – This is the last resort for finding money, and one that I don’t think she will have to resort to. There is nothing wrong with peer to peer lending (check out my review of Lending Club there) or using credit cards to start a business, as many people have done it successfully, but we both would like to avoid it. If we have to, we will definitely use 0% interest balance transfer cards though so we don’t have to pay interest right away.
So those are our (her) ideas at this point to get funding for her new small school. After doing all the research, she knows the market is here for a new Montessori school for little ones, so she just has to finish her business plan and then start presenting it. Exciting times may lay ahead, but I am sure it will all work out for the best – and then both of us will own our own businesses which will certainly change our lives for the better.
What about you? Have you ever looked for/received start-up funds from one of these sources or another I didn’t mention? What was your experience with them? Would appreciate hearing from you in the comments!