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What are the best methods to finance a business startup without incurring a lot of debt? – M.A.

Funds for financing a business startup usually come from one of four places:

1 - Your own savings or assets (including selling assets to raise cash)

2 - Loans from family, friends, banks or other lending institutions, either on the strength of your business plan or against business or personal assets

3 - Investments, where you give a part of the business to the investor for an investment of cash

4 - The business itself. You can start smaller and finance expansion to your full idea from the profits of the business

Plan your business out completely, including full financial projections. Determine how much you have on hand and the difference is the amount you need to raise. If you don’t want to incur debt (loans) and you don’t have it all on hand, then you are most likely going to be looking for an investor, either from your family and friends or from an outside investor.

Be sure you check with your attorney and accountant for your specific situation. Read more articles on small business financial management here.