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posted April 30, 1996
For almost a year now, a friend and I have been working on a project for a potential business. We are in the final stages, lacking only the starting capital to get it off the ground. I need to raise $5,000. I have been saving for several months, but my income is too low to generate the cash I need. (So far I have about $1,500.) My credit is not good, so the banks have turned down my loan requests, my credit card limits are too low to be of help (not to mention the outrageous interest). So where else can I turn for quick money? I have about two months left to meet our deadline.
Tripod: It's something of a bummer that a good idea can't fund itself. You are facing that most aggravating of problems: raising money to make good things happen. If you believe in the idea, you should be able to sell it -- and marketing the idea is the key here. Sell 35 friends and friends-of-friends on the idea of investing $100 each. Have a bake sale. Wash cars -- or get ten friends to help wash cars/bake cookies.
infernol: Hit Tripod members 4 cash.
akes (one of our many Swedish members): You have been working for 1 year to create a new idea for business and you only need 5000$ to get it in the air. If it�s good, money shouldn't be a problem. Describe the idea in a mail. If it is good I can invest the rest of the money. [e-mail and address forwarded]
paultate: If you've been turned down by enough lenders, the U.S. Small Business Administration will often fund a loan for a new start-up. There's a good bit of red tape, but it'll be worth the work if you get the money.
You might also contact the local media, if your idea is clever or newsworthy maybe a newspaper or TV station will do a feature and you can passively seek a venture partner.
Contact your credit card companies, ask them to increase your spending limit. Sometimes--if you sound like a hardship case--you can get the funds.
Consider going back to college or grad school (if you're not already there) and take some low-impact, continuing ed classes. Take out a guaranteed student loan to fund the coursework. When you fill out the forms for the loan, add in enough extra to cover your business needs. If you can link the business to your studies in some way, all the better. You'll get funded at a low-interest rate and only have to pay it back after you finish your coursework.
One final idea: pawn the title on your car.Robertvj: Give your friends and family a straight 20% rate of return. Remember 80% of a good thing is better than 100% of a lost chance. If you can't find people you know who want to make 20% a year till paid off you should look at yourself and ask why!
Moneyman: The federal government has a new simplified system. You need to contact the Small Business Administrationon your pc. They have a webpage.... You should be able to get funding. It is especially designed for your situation.
kara: The Small Business Administration has a website that might prove helpful. In addition, though I'm not sure on this, I believe that many banks have small business advisors, or employees of the bank that work with local businesses to finance them. It's worth a shot -- even if the bank won't lend you money right now, they may have good ideas, along with connections to other local businesses that might be able to help you out. And by making friends at the bank, once you do get your idea off the ground, you already have a contact for raising the next round of money!
VincentV: Try to find a way to let the business fund itself. That way you may starve, for a while, but you learn as you go, and don't put yourself out on a limb, at the same time. That is a fair trade off, in my book. Any viable business idea should be able to fund itself. The secret is to find out how, and it shouldn't be that hard. If the start up is capital intensive, or requires at least equipment, and tools or what not, trade, or rent what you can. Considering that the majority of small businesses fail, the fewer eggs you put into it the better. That does not mean that you should not put all of your heart and soul, because the business will not get off the ground without those two things, but when the mortgage man comes, you can't pay him with heart and soul. The idea of finding out how your business can fund itself, or at least with the smallest amount of capital possible should be priority number one. By the way never do business with family, no matter how close you are; it causes resentment, one way or another.
ToniT: All the advice given is good, you might also see if there are any local private business people that would be interested, be careful how you approach them, you don't want them to take the idea and run with it. Let me know the general outline of you business idea, I might be interested in a limited partnership. [e-mail sent]
hanism: Go to your local bookstore and buy the book _Free Money for your Small Business_ by ??? It is in the Business/Finance section. Also: Your local SBA office will also have advisors on hand to help you come up with ideas on raising the cash. Good luck!
GrandAdmiralPetry: It's worth reviewing the state of the whole economy: put in simpler words -- you must establish your market before you sell your product ... if you're a farmer you've got to plow the ground before you sow seed, etc. ...
So, you say you are a start-up: start selling your idea as an investment: stock for dividends, job positions for income (paid initially in stock) ... I'm not pushing the stock market, I'm saying, build your market, now ... you're going to be in this for years, selling every (day) ... start working today, employ every skill you need (if you're a Republican) and every skill you've got (if you're a Democrat). But really, what you're going to find-out very soon, is, whether your prospective clients can afford your product/service ... beginning with your employees willing to spend their time on this idea, and work for its fulfillment in the present tense ... and remember, ideas are indestructible: don't waste them on spoiling and plundering: you're not going to get anyone else's customers with an original idea (there's always room for more ideas).Breeden: Depending on the nature of the company you can ask potential clients for money upfront for the service or product you plan on delivering. If the product or service is a good one many companies will front the cost up front if it means they can get a discount. Also if you use this method remember those that helped get your business upfront and they will stay clients in the future
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