Financing > Financing a Small Business with Little or No Capital

Financing a Small Business with Little or No Capital

by: Norio De Sousa

Starting a business without any capital is a daunting task. How do you pay your staff? Where do you find money for stock? What can you do to improve cashflow? These are just some of the questions you'll face. Read on for a few ideas that helped me in my first year.

Insist on Deposits (To Cover your Expenses)

Deposits are a great way to finance your company without every approaching a bank or a venture capitalist.

Especially in the service industry, it's very useful to ask for a percentage of a job as a deposit. I always make sure that this amount covers ALL of my hard costs and that it's paid before any work is done.

Hard costs are costs that you definitely have to pay for the project. For example, your time isn't a hard cost but materials and contractors needed for the job are.

In some cases, this isn't practical because it forms a large part of the entire purchase amount, but a small deposit in these instances could still prove very useful.

Offer Monthly Payment Terms to Improve your Cashflow

Customers always appreciate flexible payment terms, so offering different monthly payment options can help you get more accepted quotes as well as improve your cashflow.

It's important if you decide to offer payment terms to set an effective debt-collection strategy in place. Mine is to simply get my bookkeeper to handle it. They're often asked to do this sort of thing and tend to be quite good at sending nasty, effective letters of demand.

To cover the expenses of debt collection, it may prove useful for you to add 10% to the quote if a client requests payment terms. This is a very commonly accepted practice and shouldn't hurt your sales at all.

Re-Sell Other People's Services

Find companies that offer complimentary services to your own and work out some sort of reseller deal with them. Normally you can arrange this so that your clients never even know that it's not you providing the service at the end of the day.

The beauty of doing this is that you can offer a great service without investing large amounts of money in having your own equipment, stock & staff. The downside is that you seldom have any control over the final product.

Pay Employees on a Per-Contract Basis

Paying employees for the work they've done is a great way to ensure that you don't end up liquidating your business around the quiet season. It also helps your employees (or contractors) feel motivated to do what is required of them and to do it well.

I recommend checking with your local authorities as to how to structure this. The easiest way is often to have a standard contract drawn up which you change on a per-project basis. This allows you to end the relationship with your contractor as soon as they stop performing. It also allows contractors to move on once they feel they've out-grown your company.

I usually include my contractors' fees in the deposit so I know that if the deal falls through, at least they've been paid.

Use Credit Cards as Bridging Capital

Credit cards are a great way to finance a small company, but you need to be careful that you don't use them for personal or unnecessary purchases.

As long as you keep them paid-up and in-check, you can expect the following benefits from your credit cards:

- Get up to 60 days interest-free!

- The more cards you have, the easier it is to get more.

- Get rewarded for using them.

The biggest problem with credit cards is their high-interest but, as long as you pay the full amount within the interest-free period, they're MUCH cheaper than any other form of finance!

Running a business with little or no capital is difficult but not impossible. Start using these ideas in your business today and watch it grow!

About The Author

Norio De Sousa runs a web site, www.small-business-hub.co.za, where you can find more information on starting a small business, drawing up a business plan, marketing your company & more.

How Fixed Interest Rates Work

How Fixed Interest Rates Work

by: John Mussi

Interest rates are an important part of any loan or credit line. The interest rate that you have on your loan, credit card, or other credit line can seriously affect the total amount that you pay toward repayment; after all, that's how lenders make their money.

All interest rates are not the same, however? some rates will fluctuate over time as local and national interest rates change, whereas others are set at a certain level and remain at that level until the loan or credit line is repaid in full.

Below you'll find information on the latter type, which are known as fixed interest rates.

Defining Fixed Interest Rates

A fixed interest rate is one that remains at a specific rate regardless of the increases and decreases of interest rates locally and nationally. This means that if an interest rate is fixed at 10%, it will remain at 10% until the loan or credit line has been paid...

How Fixed Interest Rates Work

Financing > How Fixed Interest Rates Work

Home Equity Loan Comparison - Access Your Home's Equity Through A Second Mortgage Or Equity Loan

by: Carrie Reeder

You can access your home equity without the cost of refinancing with two financing options. A second mortgage will give you a lump sum check with a fixed or adjustable rate. A home equity line lets you tap into your equity when you want to. Both options allow you to write off interest on your taxes and avoid high financing costs.

Benefits Of A Second Mortgage

A second mortgage allows you to borrow up to 90% of your home?s value. The lender, which doesn?t have to be your primary mortgage lender, writes you one check. You can choose to pay off credit cards or make a major purchase.

Fees are none to minimal with a second mortgage. Rates are usually fixed and last 15 or more years. A 15 year loan lets you pay off the debt quicker, saving you cash on extended interest payments.

Benefits Of A Home Equity Line

A home...

Home Equity Loan Comparison - Access Your Home's Equity Through A Second Mortgage Or Equity Loan

Financing > Home Equity Loan Comparison - Access Your Home's Equity Through A Second Mortgage Or Equity Loan

A Simple Real Estate Investment Plan To Make A Million Dollars or More!

A Simple Real Estate Investment Plan To Make A Million Dollars or More!

by: David Schneider

This is a very simple Real Estate Investment Plan that anyone can do. In fact, because it?s so simple most people won?t do it. There are only three simple steps.

>> STEP 1. Go out and borrow one million dollars.

>> STEP 2. Use the million dollars and buy one million dollars worth of well-selected real estate.

>> STEP 3. Get other people to agree to pay off the million dollar loan for you.

Sounds easy. Right? Well it is. Think about this.

In the next year, I want you to go into your real estate marketplace and see if you can find two single-family houses, townhouses or condos in a starter price range. The price range will vary depending on the area of the county that you are in. For my example, I'm going to use a range of $150,000 to $200,000 per property.

I want you to buy these two properties and you should be able to borrow...

A Simple Real Estate Investment Plan To Make A Million Dollars or More!

Financing > A Simple Real Estate Investment Plan To Make A Million Dollars or More!

Automotive Financing - Benefits To Applying Online

Automotive Financing - Benefits To Applying Online

by: Carrie Reeder

You can do everything else online, why not acquire an auto loan as well? Some people are hesitant to use the internet for financial transactions or decisions. They don't realize that online auto loans actually have significant advantages to standard auto loans. There are several benefits of applying online for an auto loan.

Lower interest rate

There are several places where one can get a loan. You can get a car loan from the dealership, bank/credit union, home equity, and online. The online resource typically will have the lowest interest rates of all methods. There are even sites in which auto lenders will compete for your business. This creates much lower interest rates than you could ever imagine at a bank or dealership.

No Additional Fees

Another advantage of an online automotive loan application is the absence of extra fees. You do not have to pay an...

Automotive Financing - Benefits To Applying Online

Financing > Automotive Financing - Benefits To Applying Online

The Quick Guide to Buying A Vehicle

The Quick Guide to Buying A Vehicle

by: Dave Lympany

Buying a car will most likely be one of the largest purchases you make in your life and so its importance cannot be understated. With such a huge array of vehicles to choose from, throughout the various price ranges, research will be the key to a successful purchase. When you are thinking about buying a car there is one important factor to appreciate
? in financial terms nearly all vehicles are liabilities. That is they LOSE money and are an added burden to your finances ? not only the initial purchase but also the insurance, gas costs, repairs and then the depreciation when you come to sell it.

That said, they are also fast becoming an essential possession in the modern world ? only major cities have comprehensive public transport systems, so to get around at your convenience there is only one option ? buy a car.

The first item to consider is the method of payment for the vehicle...

The Quick Guide to Buying A Vehicle

Financing > The Quick Guide to Buying A Vehicle

Owner Financing - Safety Tips

Owner Financing - Safety Tips

by: Steve Gillman

Why offer owner financing when you sell? A higher price, to start with. Add to that a good return on your money, a faster sale, and an easier sale of a "problem property." Good reasons, but how do you do it safely?

1. Ask for a large downpayment. This is the most obvious way to be safe, but not always possible. The point of owner financing is to help the buyer get the property, and downpayment is one of the areas most buyers need help.

2. Ask for other security. If a buyer wants it with little down, and you like the return you'll get, make it safe by putting a mortgage on other property that the buyer owns. Agree to release the mortgage when they've paid down the balance to a certain level.

3. Credit checks. Ask them to pay for and bring you a credit report. Bad credit might be okay, but type of bad credit is important. An unpaid hospital bill they're disputing is obviously not as relevant...

Owner Financing - Safety Tips

Financing > Owner Financing - Safety Tips

Subprime Mortgages And A Past Bankruptcy

Subprime Mortgages And A Past Bankruptcy

by: Carrie Reeder

Even with a Chapter 7 bankruptcy in your credit report you can still qualify for a sub-prime mortgage. Once approved, you can then use your mortgage to improve your credit history, qualifying you for lower interest rates in the future.

The Effects of a Bankruptcy

A bankruptcy will affect your credit score based on how long ago it was. So a bankruptcy discharged less than a year ago will qualify you for a D loan. These types of loans usually require 30% down and a high interest rate.

By waiting a year after a bankruptcy, you can qualify for a B or C loan with their lower rates and down payment requirements. If you wait two years, you can qualify for a FHA home loan. In four years, you can qualify for a conventional loan.

Besides your bankruptcy record, financing companies will want to see a steady payment history. This includes your credit and rent payments. Cash reserves...

Subprime Mortgages And A Past Bankruptcy

Financing > Subprime Mortgages And A Past Bankruptcy

Financing a Small Business with Little or No Capital mortgage calculator Financing

Managing Evidence-Based Self-Insurance Plans

by: AllMed Healthcare Management

Instead of contracting with a traditional health insurer to provide group health insurance, many organizations are turning to self-funded insurance plans that are managed by third-party administrators or an outside health management company. According to the Employee Benefit Research Institute (EBRI), about 50 million workers are covered with self-insured group health plans. To help...

Managing Evidence-Based Self-Insurance Plans Financing a Small Business with Little or No Capital Financing

Financing > Managing Evidence-Based Self-Insurance Plans

What Gals Really Want For Christmas!

by: Matthew C. Keegan

Okay, guys: listen up! I am here to tell you what women want for Christmas. You probably already know it, but you don?t understand it. What am I saying? Well, those little ads that have been mysteriously popping up on your dresser, on your workbench, or plastered to the windshield of your truck did not get there by accident. Somebody who wants you to pay close attention to what she really wants put it...

Financing a Small Business with Little or No Capital

Financing > What Gals Really Want For Christmas!

Financing a Small Business with Little or No Capital

Financing a Small Business with Little or No Capital Financing tax help

Western Theme Party Ideas

by: Dee Schrock

Howdy! Here are a few ideas for rowdy, rootin-tootin western theme party.

Western theme parties are one of the most popular theme parties- sure to go over well with all your guests.

This popular theme party can be prepared in less than a day, or in only a few hours for those high energy hosts!

Welcome each guest with a bandana and sheriff's badge.

Decorations

Think rustic and hearty! Here...

Financing a Small Business with Little or No Capital Financing

Financing > Western Theme Party Ideas