First – always look to personal assets or personal means. Now, I know that you don’t want to hear this but if you don’t have any other choice and you truly believe in your business – then why not use your own assets or cash to get that business off the ground and making money?
You want a bank or lender to take a risk on you but you won’t take a risk on yourself – just does not seem fair.
Plus, I can guarantee you this: If you have your own assets at risk you will work harder and longer to make sure your business does succeed (which is the end goal anyways).
Second – other bootstrapping means. There are many ways to bootstrap your business besides using your own personal funds or assets. You might look into:
Crowd funding – while this might not provide a huge amount of money, it might provide enough to get started. Once started, other financing avenues will begin to open up.
Friends and family loans – your friends and family know you best and if you can’t sell your business concept and benefits to them then you will never be able to sell it to paying consumers. Even if your friends and family can’t or won’t invest in you, they may know of others who will – you just have to ask.
Micro credit lenders – backed by the SBA, these lenders provide more than just small amounts of capital – usually up to $35,000 with the average loan being around $13,500 – they also provide advice and guidance to help you better manage and grow your operation.
Third - Look to partners or investors. If your business concept is not in a huge market, has high and quick growth potential or has a lot of proprietary assets, then you will have to look locally. Get out and network in your community for other business owners or local investors.
You would be surprised at how many local or retired business owners just want to give back to their community and can provide more than just capital but can open up many other doors to you and your business. You just have to get out there and talk to everyone who will listen. And, don’t be afraid to ask. If you don’t ask, you will never get what you want!
While you might hear of others business owners landing some type of bank debt or professional investment to get their business started; also know that there had to be some outstanding circumstance or reason for it - like their uncle being the president of a national bank or as a favor to a well known family member or just simply that they have other sources of outside income that qualifies them for the loan.
The bottom line is that banks and other lenders just do not lend to start-up businesses.