How to Obtain Financing to Start a Home-Based Business

Home based businesses are often inexpensive to begin, some starting at just a couple hundred dollars. Some businesses, however, that can pay more substantial commissions of $1000 and more per sale can cost several thousand dollars to get started. The majority of those who are engaged in finding a home-based business are simply not able to reach into their savings accounts and pull out $3000 or more to get started in this high-ticket business.

There are several solutions that exist for the man, woman, couple or family who are looking for the start up capital for such a business.

Traditional Bank Loan: This can be a pretty good way to go, but requires good credit and often requires a number of hoops to jump through. The advantage here is the generally lower interest rate that can be obtained as compared to a credit card.

Credit Card: This option will work for most as long as the credit is available. Sometimes an increase of credit is possible. The disadvantage here is often a high interest rate, although a successful business can produce a much greater positive return than the fees associated with its financing.

Borrow from Family, Friends and/or Relatives: This option is sometimes available to people. Often ego will play a part in the decision to go this route and an individual may not want to ask for the help.

I've started two home-based businesses before and I've borrowed the money to get started each time. Each time I've borrowed about $4000 in order to get started, but in each case it has paid off and I've earned that money back with just a few sales made. Both times I borrowed the money to get started in my business it was a no interest loan and I was able to obtain the money within a very short amount of time with just a call to a friend. This can be one of the easiest ways to go.

Rummage Sale/eBay: Some find that they don't have any other options, and the only way they can get started is to sell some of the extra things they have. I've even heard a story about a time when someone sold a cow to get started in their business. That's what I'd call commitment.

Company Financing: There are a select few companies that provide financing or payment plans to its members to get started. The business I work with, for example, offers its members financing to purchase their lifetime vacation membership (the product that members also sell) for just $85 a month to approved credit. However, the challenge can be if the applicant has a very low credit score which can restrict approval.

I've personally always been surprised by how little money most people actually keep in their bank accounts as liquid cash. When I go to the ATM (and I live in a wealthy area) I'm always surprised to find a receipt left in the machine from the previous user and the balance reflects just a few hundred dollars.

This is an important lesson to learn – the power of simple savings. Savings is one of the things that American's are the worst at, but it is an important thing to do. I believe that the more money I have in my bank account the more I believe I am able to earn a higher income.