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Raising Finance For Your Work At Home Business

One of the most fundamental elements of taking any business through its early growth phases is finance. Most businesses fail because they are undercapitalized, and lack the basic cash resources to keep funding their operations. These are often fundamentally profitable businesses that can’t afford to keep the lights on, because they don’t have a big enough safety net yet built up within the company.

For those in the process of starting a work at home business, regardless of its type, raising finance is absolutely key to making the business a viable option. There are a number of different types of finance open to new businesses, and it is worth investigating these in order to best secure the funding your business needs.

Work at home businesses can be among the least capital intensive businesses to start. The fact that these concerns can be run from home solves the problem of a commercial premises, which is a costly burden to embrace on a monthly basis. Work at home businesses often require less substantial financing in their early stages, although they may still need some financial support to start moving.

Image source: http://mumwritesbooks.files.wordpress.com/2012/06/working-from-home.jpg

The low cost profile of these types of businesses is no doubt a major advantage. Arguably, however, this may make it more difficult to establish credibility for your business in the eyes of potential funders. So where might you look to find the financial support you need?

The first port of call tends to be the bank. Banks exist to lend money, and businesses need to borrow money to get started and to fuel their growth. This creates a close symbiotic relationship between banks and business, and it is often a logical place to start. New businesses may find it difficult to get a loan outright without additional security, usually in the form of a personal guarantee or some type of security. Any loan you do manage to secure will be repayable with interest, and your business will be required to meet this obligation as it moves forward in order to remain solvent.

 
 
 

Image source: http://desperatehousebuyers.com/wp-content/uploads/2012/05/workfromhome.jpg

 

While this is definitely a very expensive route to take, there is certainly some logic to personally borrowing to support your business or trade. However, some lenders may be unwilling to offer funds for this purpose, and it may be the case that you have to look elsewhere to secure the funding you need.

Successful CEOs and business leaders, like Managing Director Cecilia Ibru, often run businesses with diverse sources of finance. Selling equity in the business is one option these more established organizations can use, and this means there is no debt or repayment schedule to adhere to. However, this dilutes the holding of the founder, which in your home business will render you with a lesser share of profit.

There are a multitude of ways to raise money for your work at home business, each with their own advantages and question marks.


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