There is a lot to consider when funding a business with your own money. The advantages are obvious as you won’t have the obligations of any outside party as well as the complete freedom of your business. However, what you need to consider with funding with your own money/savings is the risk tolerance. You need to ask yourself:
• Are you funding your company with your entire savings?
• Are you willing to lose your entire investment? If you do lose your entire investment, will it impact your retirement or will you be unable to retire?
• Would the business easily be able to get outside investors/loan at favorable rates?
The important thing to consider is if you lose your investment, and you drastically affect your retirement, I would re consider. You have to make sure you believe in the business and it is a solid investment.

I was curious about the personal funding option because my husband and I are starting a home-based food product company this winter and we're planning to fund it ourselves. We're fortunate to have the money to do it, but I've also been thinking that maybe I was doing something wrong since so many people seem to start out with loans. I just figured why go that route if we don't have to, right?

On normally a small scale, and a bit off topic that still applies to the masses...

Most small businesses are initially funded with personal capital. Risky, but fast and simple if you can afford it - as well as the type of business structure you're dealing with. As Wanderer said, a sole proprietorship would be a classic example of using personal finances to fund a business. Once a small business is established, logic would tell me to look at lending with a business tax id # ( EIN ), pretty much the same as a social security number for a business.

You could consider being a "sole proprietor" and approach it with this possibility.

This question is huge. There are many types of loans from SBA's, to lines of credit, to operating capital, to loans on inventory, to loans on assets, to loans on accounts receivables and so on. Your best bet is to find a business center in your area and have them fill you in ... this is a big one. A University Extension Service in your state or your state's economic development agency could put you on the right track. I didn't even scratch the surface on types of funding you might find. Many would want a concept plan, business plan for at least three years, your personal assets and I could go on. Frankly they may use the three C's of credit in the total process.

Oh yes, there are often times personnel that work in conjuction with counties and cities that will provide the service or assistance on small business loan packaging. Sometimes private community development corporations and community bankers generally have people they know who can assist. Sometimes the service will be free to a nonminal charge while others may charge by a scale depending on how involved you might need. Having worked as an economic development director and a member of economic development authorities there are many resources.

Hi,

Each lender is going to have their own underwriting criteria for approvals, however you will want to have a loan package prepared prior to going in to any lender. It show you mean business and you know what your doing.

If you do not know how to create a loan package here is a free resource]

You will also need to have good personal credit as well as your own funds to put into your new business venture.

Regards,

Erik Salmon

Sorry, I did not know we could not add links in our reply's. So If you need to know how to create a loan package simply Google how to create a loan package and you will have plenty of resources. You can also contact me and I can direct you to some resources.

Hi,

Each lender is going to have their own underwriting criteria for approvals, however you will want to have a loan package prepared prior to going in to any lender. It show you mean business and you know what your doing.

If you do not know how to create a loan package here is a free resource: [Link removed by FG]

You will also need to have good personal credit as well as your own funds to put into your new business venture.

Regards,

Erik Salmon

What are the requirements for a small business loan? I am thinking of starting a venture, home-based and all. Do I need to have it registered to qualify for a small business loan?

This question is huge. There are many types of loans from SBA's, to lines of credit, to operating capital, to loans on inventory, to loans on assets, to loans on accounts receivables and so on. Your best bet is to find a business center in your area and have them fill you in ... this is a big one. A University Extension Service in your state or your state's economic development agency could put you on the right track. I didn't even scratch the surface on types of funding you might find. Many would want a concept plan, business plan for at least three years, your personal assets and I could go on. Frankly they may use the three C's of credit in the total process.

What are the requirements for a small business loan? I am thinking of starting a venture, home-based and all. Do I need to have it registered to qualify for a small business loan?