When starting a business, the first question that comes up is how you plan to fund your venture. Funding the start of a business is never cheap. You should explore all of your options to find which one is best for you. By finding the best option, you can save thousands of dollars in the long run. Here are some of the funding options that are the most useful: If you already possess the resources necessary to start your business, this should obviously be your first choice. Through self-funding, you will have no interest rates and no monthly payments. The total you spend on getting your business up and running will be significantly lower. These same principles apply to any personal acquaintances that are willing to provide you with funding. If you present them with a business model outlining exactly what you plan to do with their money, they will be more inclined to make the investment in your business. Alternatively, some business starters feel that they will get immediate and high returns on their venture. If this is the case for you, then you may choose to use a credit card to get your business going. As long as you are able to make all of your investment back before the interest is compounded, this method of financing is completely free of interest. If you have a good borrowing history, banks will be likely to give you a personal loan. If you choose to take out one of these, you will receive a large lump sum to start with. You will make regular payments, and the interest will most likely be compounded monthly. These are a popular route to take for entrepreneurs, but can land you in big trouble if you aren’t able to make a payment.  If you own a house or another business, you can use its value to open an equity line of credit. The bank will lend you money with your valuable asset as collateral. This will give you immediate access to a certain amount of money every month. Interest must be paid on these, but only for the money which is utilized. Commercial loans are another very valid option. These work like a personal loan, but the bank will require information about your venture, and what you plan to spend the money on. Commercial loans differ because they are usually larger sums with higher monthly payments. Many regions with suffering economies offer micro loans from local government agencies. These are small loans designed to get your business on its feet. Many non-profit organizations work to provide these to entrepreneurs in order to boost the growth of smaller towns. Governments also provide funding for businesses in the form of grants. These are usually designed to provide economic growth, or to encourage research in a certain industry. The options vary greatly from industry to industry, so it is best to do broad research when looking for information on grants. There are some people known as angel investors who prefer to make high-risk investments which are more likely to offer high returns. Angel investors require the possible returns to be very high, so if you are just looking to start a very small business then this probably won’t be the route to take. Slightly different from angel investors are the venture capitalists. These are usually groups of people who have pooled their money together in order to invest in new and upcoming technology. They usually require large returns, and are fairly hands-on with the business. They may provide guidance or their own ideas on what direction the business should be taken. All of these methods are perfectly achievable for anyone who wants to start a business. Which one you choose will depend on many factors, such as how big your business will be, how much money you need, what sort of area you are looking to set up in, and what kind of credit you have. ©2006 RockHillCottage