Resources If You Have No Credit

Expert Author Katheryn Hoban
Probably the greatest reason for failure of a new business is the lack of capital first to open, secondly to expand, and thirdly to sustain itself through the cost of doing business. A newly launched business lives under the law of catch 22 and that is that a bank usually doesn't want to take a risk on your new business until you're able to prove yourself by putting up 25% capital on your own, and that you have been in business for three years.
So where do you get new capital to fund your enterprise? There are many sources that you can tap to begin your journey of self employment and first time business owner. If you have no credit with the banks and there fore no access to loans and credit cards are out you might start saving every extra dollar that you earn, stop drinking the lattes and ordering take out. Put as much away as you can before you launch your business, save your spare change, stop spending, and cut your expenses at every turn.
Another source is a second job. If you really want to start your own business put off opening your business for a solid year to accumulate a good chunk of savings. It's not ideal to have to work an extra job but you have to do what is necessary if you are starting at zero. If getting a job or second job is not a possibility start with your family, spouse or partner or a trusted friend. Explain what you would like to do and ask for what you think they would be able to afford. If that is just not a possibility ask if they might co-sign on a loan for you. If the answer is still no see if there is someone that you have become friendly with to see if there is a possibility to give you your financial start. It could be one of your own clients or an older person who has some savings, it could be an acquaintance that has the capability to create a loan or note for you.
If you are a property owner you could get a line of credit or equity loan against your property. Sell what assets such as your car, boat, electronic equipment, stereo equipment that you are able to raise the funds that you need to start. It may not be much but it will start you off.
There are other unconventional methods to raise capital. One is a circle of funding source. There are established groups out there that provide capital to each member of the group or team who contribute a monthly amount to the circle fund. Each month let's say each member of a group of ten or more contribute $100.00 to the fund. Each month the money collected is giving to one of the team until everyone receives the collection month after month. For an example ten people contribute $100 in the month and one person of the group will receive $1000. The next month the second team member receives the $1000 and so on. Then when every one has received the collection you start over. The problem with this method is that there are lots of unscrupulous people out there who will steal your money. It would be better to work with only those trustworthy and reliable individuals that you can depend on.
Another potential source to raise capital is to run a raffle. What you need is permission by your state or county, and you will need to describe how many tickets, your intentions and what you intend to give away. Next you contact a local merchandise company that may benefit by participating in the raffle. Next you get raffle tickets printed up and a description for potential buyers of what they will win and what the raffle is for. Then you sell the tickets, draw the name and either receive the donation or buy the merchandise from the merchandiser from the proceeds of the raffle. Make a big event and present the winner with a redeemable gift certificate or present the actual merchandise.
The point is that if you think a little creatively you can probably come up with a few methods of raising capital. It's not always easy but then again few things that are worth while are ever easy. Keep your focus use your talents and get the capital to launch your business. That's what matters.


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