Converting a limited liability company or any other business from a dream to a reality requires time, effort and lots of cash. While it may be difficult for you to set aside a significant amount of your own money to fund your business, you might get the cash you need from other individuals or institutions.
Your personal assets, including your investments and bank accounts, may be a good source of the money that’s needed to back your entrepreneurial dreams. It will simplify the startup process if you have some or all of the cash you need sitting in a savings account. In addition, banks and other capital sources may unwilling to loan you money unless you share in the investment’s risk.
Private investors, such as angel investors and venture capital firms, offer more than encouragement to entrepreneurs, they offer the financial capital required to get a businesses started. Venture capital firms obtain the money they lend to different companies by pooling the money of multiple investors. In turn for a loan, the firm acquires a membership interest in the company.
If your limited liability company is insufficiently developed to attract major investors, you might consider crowdfunding. Using this funding method, you can gain access to the cash you need to fund company operations, but you’re not required to sell an interest in your business.
Family members, friends and other personal acquaintances may be willing to invest in a solid business idea, assuming you present the idea in the form of a well-crafted business plan. Formal paperwork may and may not be required for the loan.
Small-business credit cards are available to business owners with a good credit history. Keep in mind that this may be a good funding option only if your business generates sufficient cash to pay the credit card balance in full at the end of each month. If you use this financing method, it’s important to sign up for a low-interest rate credit card.
Banks and credit unions serve as sources of capital for businesses, including for a limited liability company, if your business plan suggests that your company may have a positive economic influence on the local community. The probability a bank will lend you money is increased if you’ve made a personal investment in the LLC.
The government offers some loans to small businesses, including for a limited liability company, through the Small Business Association. For example, LLC founders may obtain a general small business loan or a small, short-term microloan from the SBA. The SBA might also grant an LLC a loan to acquire fixed assets or real estate.
If you are ready to incorporate contact Inc Plan (USA) for a free 30 minute consultation about your business. We can help find a solution that works for your business and answer remaining questions you have about starting a company.