Starting an Internet Business When You Are in Debt

Do you have an internet business idea that you feel is out
of reach because you are already in debt? Debt does not have to be a barrier to
starting a web based business. While you may face challenges that others with
easy access to a bigger cash flow and better credit do not, there are many
things you can do to get the financing you need.

Refinancing Student Loans

You might ask why people would refinance education debt
if they want to become an entrepreneur? Student loan debt is the largest debt
many people carry, and it can be crippling paying back the high interest for
decades. Refinancing a student loan means that you take out another loan with a
lower interest rate and pay off the existing. This can free up cash that you
can use to put toward your business.

Seek Alternative Loans and Investments

In some cases, even after you have lowered your debt, you
still might not look like a good risk as far as banks are concerned. However,
this is not the only place you can go to get a loan to help fund your company.
The Small Business Administration is one resource you can try. You may be able
to get funding from private investors or micro-lenders. You could also consider
taking on a partner who can help with funding. Creating a business plan can
help get this financing. There are also more unusual methods of raising money to
start a company
, such as crowdfunding. Some communities have what is known
as a lending circle, which offers loans that are interest-free to small
businesses and individuals.

Look into Asset-Based Loans

If what you need is equipment or short-term financing while
invoices are outstanding, you may be able to get an equipment loan or accounts
receivable financing. These loans differ from other types of business loans
because they are tied to the specific asset they are being loaned to help with.
If an equipment loan is not repaid, the equipment can be repossessed, and in
the case of accounts receivable financing, money can be recovered from
customers. This means there is less risk for the lender, so if you have debt,
it might not disqualify you.

Seek Out Low-Cost and Free Resources

In addition to the Small Business Administration,
there are a number of organizations and resources that can help low-income
people and people who are in debt become entrepreneurs. SCORE is a network of
voluntary mentors that partners with the SBA and offers workshops, classes and
more. Libraries have many free resources related to entrepreneurship, and there
are also free and low-cost tools online that can help with everything from
email to websites, setting up conference calls, faxes and more.

Reinvest Profits

The company can be grown by reinvesting profits into the
areas that will give the greatest return on investment. In many cases, this
might be marketing. Once profits and performance become more consistent, you
can start paying off your debts. Slow, conservative growth can help ensure that
you do not fall deeper into debt and that the business is built up steadily.

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