Every type of business will require some funds to get started. Not only do you need a money to start a business but you will also need to have the funds to carry out a marketing campaign on it. A marketing campaign is important in order to advertise and get the word out about your products. The following are 3 ways you can funds a startup business.
- Use the Money from Your Savings
The easiest way to fund a business is to use your own savings. You can start saving some money from the job that you are currently doing. The only problem with this method is that there will be a limit on your capital. Some homeowners borrow money through home equity line of credit, which is borrowing against the value of their homes to fund their businesses. However, borrowing from home equity can be risky. You may lose your home in the event your business is not successful and you cannot come up with the funds to pay back.
- Borrow Money from Credit Cards
Many people have used their personal credit cards to finance their businesses. Credit card has a limit of a few thousands dollar and is suitable for use in buying small items for the business. You are also entitled to some protections when you use a credit card to pay for your business expenses. Some people have also withdraw cash advances to pay for business expenses. However, cash advance has expensive interest rate. You may find yourself trapped in a debt if you depend on cash advance as a source of financing.
- Ask Friends or Relatives to Lend You Money
People who have no savings, and no credit cards and no credit history to take out loan will usually resort to friends and family members when they need to borrow some money. With this method, you can risk damaging the relationship with your friend if you can’t pay back. Your friend may appear generous but his face may turned sour when you say you can’t pay back.
To prevent this from happening, it is best that you put everything in writing, for example through a promissory note. In the promissory note, you list down all the conditions of the money loaned clearly. It is way to show that you are serious about paying back the loan to your friend. After addressing all the conditions in the note, you and the lender will have to sign it to validate it as a legal contract.
You can use any promissory note template as long asit has all the necessary elements. Movavi PDF Editor includes a free professional promissory note template that you can use for an unsecured loan you have borrowed from your friend. Filling the promissory note form only takes a few minutes. Get more details at https://pdf.movavi.com/promissory-note.html.
Most of the information are already there and you only need to fill in basic information in regarding to the borrower/lender identity and the loan. The files are fillable, meaning, you can click in them and start typing to enter the information. When you are done, you just press the save button and print it out.
The promissory note template in the software covers all the basic agreement in between the borrower and lender. It is like a simple promise written on paper and no collateral is needed to validate the note. However, keep in mind that the document is legal and will produce the same consequence on the borrower who default like a bank loan. The lender may repossess the borrower’s property as stated in the note. He may also attempt to seek restitution by sueing the borrower in the court.