financing

"1. Grants: A variety of private foundations and governmental agencies offer these grants and loans, but finding one that you qualify for may be difficult. In fact, unless your product or service relates to development of a new technology or you are starting a non-profit organization, there is little to no value in looking for a grant from the federal government. State governments, on the other hand, do offer grant money to individuals. 2. Small Business Loans: Small business loans, on the other hand, are more readily available and may be a good option for you. These generally take the form of loans made by private institutions that are then guaranteed by the U.S. Small Business Administration (SBA), a federal agency that was established in the 1950s to assist small businesses. 3. Social Lending: Another less traditional financing avenue is peer to peer lending. We did not pursue this route, but it does offer a reasonable fixed interest rate for up to three years. One p2p lending option is LendingClub. To qualify, you must have a credit score of at least 660. The interest rate is based on several factors, including your credit score, loan amount, and amount of outstanding debt. One of the best benefits of peer to peer lending is that the interest rate is fixed (which provides security against interest rate increases) and amortized over three years (which forces you to discipline your spending). 4. Home Equity Line of Credit: If you need to obtain traditional financing and own your home, the best option is likely a home equity line. These loans usually offer relatively low interest rates and tax deductions. Despite the recent credit crisis we obtained, through our credit union, a $50,000 home equity line of credit with an APR below prime. If you do not own a home, discuss your options with at least three financial institutions. If you are a member of a credit union, or know of one that you could join, this could be your best option since credit unions are non-profit organizations. 5. Credit Cards: The many rewards offered by credit cards make them a viable option for funding a new small business. We used a business credit card to fund various start up costs, but we made sure to pick the right kind of card. We chose a card that offered an initial cash back and future cash rebates when we make business purchases from office supply stores and other retailers. Another option is to pick a card with a 0% APR introductory offer on purchases. There are many credit cards that have no interest for 12 months that are worth considering."

"If you don't owe anyone money, you won't have to worry about late fees, interest, annual fees, or over-the-limit fees. The best way to treat yourself to something nice is to save up for it and buy it when you can truly afford it. The peace of mind that will come with not financing your purchase will be like treating yourself twice."