by Charles Roring in Manokwari Indonesia
Your effort to make money from home will be easier if you have capital for it.After you decide the kind of new business you'd like to open and make a business plan for it. The next step to realize it will be obtaining some money as your initial capital.
Before asking for a loan, you need to know the exact amount of money that you need for your investment.If you plan to make and sell products such as shirts, shorts or dolls, you need to secure loan for buying raw materials, machinery and fixtures, and other office equipment.
However, if your business is a service business where you sell your expertise to customers in your town, you won't need a lot of capital for your business. Securing a loan from a bank is not an easy thing to do if your home business is a sole proprietorship.
Some commercial banks require that you have run your business for at least one year before they decide to give you some loan. As an alternative you could borrow some money from your parents or friends. Remember that borrowing money from friends or relatives could strain your personal relationship with them.
From my personal experience, I started my home book selling business using my own savings and loan from a Bank BNI that was guaranteed by my father. I don't know if such scheme is allowed in your country. I don't have property which I could use as collateral for the loan that I asked from the bank. So, as a solution my parents gave their house and land as the collateral for the loan.
It means the loan is in my parents name but I am the one who has to pay it back.If you consider about other sources of capital, you could try schemes such as partnership, or corporation. But they will lessen your control over the business that you are about to run. Also investors are only interested in more stable business than a start up one just like yours.As a matter of fact, my bookselling business is not my first money making endeavor.
I used to run an English course. It is still running now but a professional manager has been appointed to run it by the shareholders. So, I have known the advantages and disadvantages between sole proprietorship and corporation.
Now, what sources of capital should I recommend to you? I cannot recommend anything because different business owner face different financial situation.What I want to say here is that you have to be careful in deciding things related to loan or shareholders, partners and bondholders. If I have to choose, my recommendation will be obtaining loan from a bank.
When you apply for a loan from a commercial bank, it will analyze your application based on criteria such as capital, collateral, capability, character, coverage and circumstances. You must answer all these criteria in your loan application. But don't get discouraged when you read my explanation above. You have to know that the most important capital for your new money making business is you and your workers. You have to be capable, creative and energetic entrepreneurs in order to be successful in your business. Apply for a loan now and start to make money from home.
