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Private Investor, Loan, Small Business: Concerns and Tips

Deciding between a private investor, loan, small business grant or venture capital is something that will require research, study and intuition.

 

 

Private Investor, Loan, Small Business

by Trish Williams

Private Investor, Loan, Small Business Financial Concerns Examined

Are you considering getting a private investor, loan, small business guidance on financial issues or hiring a business consultant? Small businesses have many concerns, especially when it comes to financing their enterprises. Whether a business obtains traditional financing through a bank or considers a private investor, important questions need to be asked.

A look at four different types of financing: Private investor, loan, small business grant and venture capital

A private investor, loan, small business grant or venture capital are among the many types of financing available for small businesses. The differences between them vary.

A private investor

A private investor may be a wonderful option if you haven’t established much credit yet in your life. They are likely to work closer with you and give you a chance at establishing credit. A private investor may be the way to go if you have a very specific and unique idea that traditional banks may reject, or if your venture is very risky. A private investor is more likely to be found among your family, friends or peers. Sometimes private investors are looking for talent and unique products to finance and can be found advertising online or in a business magazine. Some agencies provide listings of private investors and can help small businesses get hooked up with them.

Loans

Loans vary, but are often the most common way to obtain financing for a small business. Establishing a good relationship with a banker is important. Bankers are extremely helpful and well trained in the loan process, and can often make suggestions that can save you a lot of time and energy.

Loans vary in amounts, and the length of time allowed for paying them back. The interest rates on loans can range by a few percentages, but each percentage can make a difference. There are fixed rates and rates that can go up and down, depending on the economy. Be sure to ask your banker about what type of loan is best for you. From there, they will have you fill out a loan application.

Small Business Grants

The small business grants, among the private investor, loan, small business grant or venture capital choices, can be tricky. Many government grants can be obtained, but often have strict stipulations. This website reviewed 12 government grants.

Sometimes grants can only be given to non-profit organizations. If you’re not in this category, obtaining a grant may be close to impossible.

Venture Capital

Venture capital is a wonderful source of financing for small businesses. From 1970 to 2003, venture capitalists invested $338.5 billion dollars into more than 21,600 US companies according to the National Venture Capital Association. California, Texas and Massachusetts were among the states where venture capital was at its highest.

Deciding between a private investor, loan, small business grant or venture capital is something that will require research, study and intuition. Start with the Small Business Administration and go from there. Success is only a few dollars away!

Trish Williams is a freelance writer and marketing consultant who has published numerous articles in magazines and newspapers across the country. She also works on web design, web content, graphics, promotions and copywriting.

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