In a perfect world, small businesses can get all their business capital needs from professional business loans but it’s not the case. When all else fails, family and friends can be your next best option for business funding.
Some small businesses won’t cut it for a traditional loan for lack of credit history but this doesn’t have to stop you from getting your capital.
Most people do not realise that the people around you can also be the best resources for your business. As intimidating as the thought is, borrowing business capital from family and friends can be easier compared to applying for a bank loan. However, just because they can be your source of funding doesn’t mean you must abuse the thought.
Think first before bringing the idea of money into the table. Carefully assess the situation. Are your friends and family able to lend you money? Not everyone is cash fluid. Consider their financial situation before bringing them in your plans.
Many business owners will tell you that before seeking financing from the people around you, make sure you start with the premise that the relationship is still more important than the business. Do not forego a good relationship just because you cannot get what you need. Other tips include:
- Being brutally honest – if you tell them what the money will be more then maybe they can understand you better.
- Only borrow from people with stable and enough financial capabilities.
- Set the amount you need.
For more financial help, talk to us at Gapcap. We have the right people to assist you in securing the funding you need for your business.