Small business financing can be difficult to secure in the best of times. Finding small business loans for home based businesses can be even more difficult. In general, start up loans for these businesses are among the hardest to find. It is possible to find a lender that will jump on board, but most would like to see an established home business that is looking to grow rather than someone simply wanting to start a business from home.
Fortunately, startup costs for home-based businesses are typically very low; depending on the type of home based business you want to start. There are a few reasons for this. Mostly, it is difficult for lenders to gauge the potential future success of home-based businesses without seeing some signs of success already in place; even more so that with a standard business. In addition, discerning equipment and space between work and personal use can also be difficult, not just for lenders but for everyone involved. There are some options however, especially with those that have an established home business and wish to grow it.
Financing for Equipment
If you run a home business that is having some success and you need equipment to grow, you may be able to get an equipment loan. An example of this type of business would be a monograming, sewing, or catering business. If adding an extra monograming or sewing machine, or expanding a kitchen for more commercial use would help and already successful business grow, a bank might be more willing to offer up funds. Of course, they will have to see a business plan as always, and with any type of food service business there are certain regulations to consider.
Business Line of Credit
A great deal of personal cash can be used in running a home based business without even realizing it. A business run from home that has seen some success may be able to get approval for a small business line of credit. This could allow for work related expenses, such as a dedicated phone line or additional office space meant solely for business use, to remain separate from personal expenses. This can be especially beneficial at tax time.
Business Loans for Women
While women are certainly not the only ones that run businesses from home, they do make up a huge percentage of the work from home entrepreneur population. Small business loans aimed specifically at women may be just the ticket to growing or even starting a business from home, depending on the borrower, the business, and the circumstances.
Running a business form home is hard, and financing a business that you run from home is even harder. There are options however. Sites such as Biz2Credit.com can help by searching their database of over 1,100 lenders and connecting you to those lenders and products that best fit your small business financing needs.
This article was submitted by Faith Stewart. Faith Stewart has a BBA with a major in accounting and spent 10 years working in the various aspects of accounting and finance before pursuing her passion for writing.