Banks

Bank can be said is the primary funding source for any home based business, small business or even an established business. To apply for any loan from bank, you should prepare a proposal or in other word, a business plan, the bank would want to see your financial statement, cash flow projection, business background, asset for the business and so on. The bank like the ultimate protection of hard asset, they also want to feel that there is little chance that the business will have to call upon these assets to pay off the loan in any case.

Bank also reluctant to loan to a business that couldn’t show at least a 2 years profitable operation, they would want to see also the business owner is heavily invested in the business before they approve the loan. The bank will not also release any loan that the loan amount is more than 50% of the business capitalization.

Personal loan

Personal loan can be a great funding source for your home based business, and one of the most common means of obtaining funds from this type of source is through a home equity loan. If you have an assets (NOT YOUR LIVING HOME!) that you have pay the mortgage for several years, you can consider to refinance the asset. You can then use the fund from your home equity loan to operate your business.

SBA loan

Small Business Administration(SBA) is also one of the great funding source for small business and home based business. SBA do not usually make loan directly to small business but they will guarantee up to 90% of of bank loan to the business. I would say the term and condition provided by the SBA from any country is different, you should contact your local SBA firm for more detail information.

Look for investor

Look for any investors that might have interest on your field of home based business, prepare a business plan for your business featuring every single aspect in running the business, particularly on the financial part and make an achievable commitment to them on the return percentage they can make from their investment.

Start a home based business is not as easy as you think, it required hardwork, hardwork and hardwork. Not every person is suitable to start their own home based business, not because they are stupid, lazy, afraid or they don’t want to success, but this business venture require the person to spend lot of time and hardwork to succeed. A home based business owner may spend at least 50-70 hours per week just to operate their business, with little of rest or holiday, and probably with less income than working full time.

As the statistical data suggest, 80% of a new home based business may fail within the first 3 years of business operation. Before getting involve to start your home based business, you have to make sure that you are willing to sacrifice your time and hardwork and do what you love to do, otherwise you will be in the 80% of failing statistical data!

There are also some peoples who close their business because they found a better opportunity to work with somebody else. I won’t say closing of the business is a failure, at least the person will gain a lot of business operation experiences than anybody else.

A home based business fail can be for many reasons, but few of the most important factors are:
1. No proper research
2. No proper planning
3. No financial support
4. Lack of business operation skill
5. Start with a bad business idea
6. Entering an over saturated market
7. Unrealistic expectation
8. and etc.

If you are to start your own home based business, you are possible to achieve your own set of target and goal, but you have to be very consistent and be focus on what you are doing.