Starting a Business on a Limited Income

uk home loan

If you have a great idea for a business but no cash, it can be hard to figure out which way to turn. Often the temptation is to give up on your dream of becoming an entrepreneur, but don’t despair because it is possible to start a business on a shoestring – and here’s how.

Business Loans

Most entrepreneurs have to borrow money in order to get their business off the ground. Lenders such as are accustomed to loan applications from people hoping to make a million selling pet accessories on eBay or apps on Google Play. Not all loans will be successful, but if you have a great idea, a cast iron business plan and the drive to succeed, it is worth approaching a lender for start-up capital.

Borrow from Family and Friends

Another good place to look for start-up capital if you are operating on a limited income is family and friends. As long as your business idea is a good one, try asking a family member or close friend for a small loan to get the ball rolling. They may well say “no” of course, and if they do, consider the possibility that their judgement is sounder than yours.

If they agree to loan you some money to start your business, make sure you have a written agreement drawn up by a solicitor, so everyone knows where they stand. Falling out with a loved one over money is never much fun, so don’t ruin a good relationship unnecessarily.

Home Equity Loans

Unless you are mortgaged up to the eyeballs, your home could be a source of useful equity. Check the value of your home and if there is a significant amount of money tied up in it, it could be worth re-mortgaging or taking out a secured loan to finance your business. However, do make sure you can make the repayments, or you will lose your home.

The Savings Pot

If you have any savings put aside, consider where there is enough cash to cover the bills while you get your business off the ground. It is always advisable to have at least three months’ worth of savings to cushion you against any unexpected bills or a run of bad luck. Hopefully this is enough to keep you ticking over until the money starts rolling in.

Low Cost Business Ideas

You don’t need a huge amount of money to start a business. There are lots of low cost businesses out there, so why not see if any of them appeal?

Home-based businesses are perfect for people with no money or a low income. eBay sellers often start businesses from their spare room with the minimum of stock. Costs are low so there is little risk if it all goes wrong. The same applies to online entrepreneurs. Start small and grow the business at your own speed.

Don’t let a limited income crush your dreams of becoming an entrepreneur – we all have to start somewhere!

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