Almost everyone has debt at some point in their lives. For some people, it overstays its welcome. When you’re tired of working for the man and ready to get you and your family out of the hole, you might look into starting your own business. But, where will you find the money to finance a business when you already have so much debt?
While the country is making a slow recovery from the financial failures of 2008, big banks may be hesitant to offer large credit lines, or may require small business owners to pay off credit balances in full every month. Small businesses need access to any and all forms of money available to them. Here are some financing options:
Unless you are born into money or just really good at investing, you need credit to build a business. Outside financing is never a luxury; it’s a necessity. However, unlike being born into money, you cannot be born into having a good credit score. Many small business owners struggle with credit. It’s a Catch-22: you need history of reliable credit borrowing in order to be granted a loan or line of credit, but you need to be granted a loan or line of credit in order to prove that you are, in fact, a reliable borrower.
Even the smallest lines of borrowing and repayment can help build your credit profile. As a business owner, talk with your vendors and suppliers. Although you are able to pay them up front for their products and services, work out a deal that allows you to pay them over time. Ask if they would report your payments and consistency to the three main credit bureaus – Experian, Equifax and TransUnion. This can help build credit history. Just be sure to never forget your payments and always pay on time.
Opening a business credit card may also prove reliable lending history, so long as payments are made on time and the recommended 30 percent of the credit limit is not reached. Another option to look into would be to think of leasing equipment, rather than purchasing.
As credit history builds, you are more likely to be granted larger loans to help grow your business. Personal debt does not have to deter you from building an empire. Work around it for a while and soon enough your business will take care of it for you.
Call us today and we’ll guide you toward the financial solution that is best for your business.