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Where to get the best funding for your small business idea

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The best kind of funding is the kind of funding that you have to give up the least for.Just as you would try to earn as much money as possible before having to take out a loan and pay the interest rates for a house or a car, you want to be sure that you obtain as much funding from as many low or no interest or collateral requiring sources before seeking out traditional funding methods.For many people the best funding for a small business comes from their own savings account.Using your own money for funding means that you have to answer to no one but yourself for that money.Of course, not everyone has a small fortune stored away in an account somewhere so even with all of the extra money that they can spare they still come up short.In this very common case, many people turn to family and friends for the financial help that they need to get their business going.Although loans from family and friends are typically low or no interest and rarely have legal strings attached, failure to repay money in a timely manner can seriously strain some of your closest relationships.The danger of straining those relationships is often enough to discourage many small business owners from borrowing from family or friends at all.

For many, the option of borrowing money from banks and investors is too much of a commitment when it comes to paying back those loans and often when in exchange for the loan a portion of the business is turned over to someone else.Many are so committed to their small business that they cannot bear to see even a portion of that business in the controlling hands of anyone else.So, one way of funding your business after you have exhausted all of your current financial resources is through self-financing.Self-financing can be a number of different things but basically the idea is that you earn the money needed for your small business and invest that money into your business slowly.This process means exercising a great deal of patience and seeing very slow growth for what could be a great many years.However, for some this alternative is the best funding solution.

After acquiring all of the funds that you are capable of acquiring for minimal cost, and if you need as much funding as possible in order to get started with your small business now, the next step is to look outside of your known resources for funding.While some small business owners go to their banks for loans, others seek out private investors (also known as angel investors).Private investors will often time require less than a bank would in order to loan you money; however these loans are not without cost.An angel investor will likely want a piece of the business and that means surrendering some of your business foundation to someone else.Venture capitalists are also investors who are looking to provide capital to businesses in exchange for a portion of the company.Venture capitalists, however, generally invest only in businesses that have strong business plans and evidence of impressive projected profits.Venture capitalist money is significantly more than angel investors are able to contribute and therefore may be out of the range that a small business owner would need funding for.

There are some government funding options that may be available to you depending on the nature of the business and your financial standing.Searching for these opportunities online or asking for suggestions from your bank may lead you to these alternative funding methods.

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