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A Home-Based Business Online
Sent to 9,583 Subscribers
Editor: Elena Fawkner
Publisher: AHBBO Publishing
Contact By Email
IN THIS ISSUE
Hello again and a warm welcome to all the new subscribers who
have joined us since the last issue!
A belated happy mother's day to all of you moms and mums
out there. Hope you had a great day.
This week's article is in response to an email I received during
the past week from a subscriber asking for information about
how to obtain financing for a small business. "Financing Your
Home Business" canvasses the options, including Small
Business Administration loans, angel investors, grants and
venture capital as well as home-grown sources such as good
old Uncle Jack.
Also, for those of you who enjoyed Amy Shellhase's Reviewz
column which used to run in AHBBO will be pleased to hear that
she's baaaack ... look out for the return of Amy's column in
upcoming issues of AHBBO.
As always, thanks for reading and I hope you enjoy this week's
Remember, this ezine is for YOU! If you have comments or
suggestions for topics you would like to see addressed, or would
just like to share your experiences with other subscribers, I want
to hear from you! Please send comments, questions and stories
to Contact By Email .
Are you passionate and knowledgeable about antiques and/or
collectibles? If so, this idea may be right up your alley.
An antique/collectibles finder ... well ... finds antiques and
collectibles. And then sells them. There's any number of
purchasers you can target with your finds including antique
shops and interior decorators as well as individuals looking for
pieces of their homes. You WILL need to know your stuff though.
Your search for antiques for resale will involve frequenting not
only other businesses that sell antiques but also scouring flea
markets and garage sales. Many a jewel has been mistaken for
rubble. And don't forget deceased estates. Check your local
newspaper for advertisements for these types of sales and
You could also extend your scope of operations by accepting
assignments from dealers and decorators to find specific pieces.
And don't just confine your search to your own backyard. You
can specialize in, say, Chinese or French antiques and make
buying trips to China or France (or wherever) two or three times
a year. This can be particularly lucrative if you're based in the
U.S. because of the strength of the U.S. dollar compared to
many other world currencies. You can buy in local currency
which may well convert back to a very reasonable price
Garage Sale and Flea Market Annual: Cashing in on Today's
Lucrative Collectibles Market
by Sharon and Bob Huxford
Trash or Treasure Guide For Buyers: How and Where to Easily
Sell Collectibles, Antiques and Other Treasures Found around
Your House and Neighborhood
by Tony Hyman
How to Make $20,000 a Year in Antiques and Collectibles without
Leaving Your Job
by Bruce Johnson
Money from Antiques
by Milan Vesely
There are many more ideas like this at the AHBBO Home
Business Ideas page at free home based business ideas
with more being added all the time.
© 2013 Elena Fawkner
So, you have a great idea for a business and, more importantly,
the know-how to bring it into creation. The only thing you're
missing is the cold hard cash to get started. What are your
Assuming you don't have a ready line of credit, an expansive
bank manager, wealthy relatives or a substantial stash of
retirement savings you're willing to risk, you're going to have to
do some serious homework and legwork. Fortunately, there
are a number of sources of finance for the fledgling small business
entrepreneur, at least one of which may be right for you.
Available only to U.S.-based businesses (but look for similar
programs in your own country if you're outside the U.S.), the SBA
(the U.S. Small Business Administration) has assisted thousands
of entrepreneurs start their own small businesses. The SBA
doesn't issue grants (money you don't have to pay back) or make
loans directly, rather, it guarantees loans made by private lenders
thereby reducing or eliminating the risk inherent in new business
ventures and making lenders more willing to lend.
The primary consideration for the SBA is repayment ability from the
cashflow of the business as well as "good character, management
capability, collateral and owner's equity". You will be expected to
personally guarantee your loan. This means your personal assets
are at risk.
As for the types of businesses eligible for SBA loans, the SBA
imposes the following criteria: the business must be "for-profit" (all
that means is that your business has a profit motive, not that it
has actually generated a profit yet), be engaged in business in the
United States, there must be "reasonable" owner equity (what's
reasonable will depend on the circumstances) and you are expected
to use alternative financial resources first, including your own assets
The SBA also imposes limitations on the use of loan proceeds.
For example, although the proceeds can be used for most business
purposes (the examples given by the SBA include "the purchase of
real estate to house the business operations; construction,
renovation or leasehold improvements; acquisition of furniture,
fixtures, machinery and equipment; purchase of inventory; and
working capital"), you can't use the loan proceeds for financing
floor plan needs, to pay existing debt, to make payments to the
business owners or to pay delinquent taxes etc.
As a general rule, loans for working capital must be repaid within
seven years and loans for fixed assets must be paid for by the
end of the economic life of the assets (but not to exceed 25
Interest rates are negotiated between the borrower and the lender
but the SBA imposes maxima which are pegged to the Prime
Finally, the SBA charges lenders a guaranty and servicing fee for
each loan approved, and there is nothing preventing the lender
oncharging these fees to the borrower. The guaranty fee for a loan
of $150,000 or less is 2% of the guaranteed amount; over $150,000
but below $700,000, it's 3% and above $700,000 it's 3.5%. The
annual servicing fee is 0.5% which is calculated on the then-current
Where the borrower meets the SBA's credit and eligibility
requirements, it will guarantee up to $85% of loans $150,000 and
less and up to 75% of loans above that amount (up to a maximum
For more information about the various SBA loan programs, visit
the SBA website at http://www.sba.gov.
At present, there are no U.S. government grants offered for small
business. If you're outside the U.S. check with your own
government about the availability of small business grants. You
Various corporate grantmakers make grants available for small
business though. For more information, visit
Angel investors are good souls with a healthy sense of self-interest.
Figuring they can get a higher return if they're prepared to take a
bit of a risk, they're also often successful entrepreneurs themselves
and want to give their fellow travellers a hand up.
Think of funding from an angel investor as a bridge or gap-filler
between being a start-up and qualifying for venture capital. The
kinds of dollars we're talking about here are between about
$150,000 and $1.5 million. Beyond that point you're in low
The SBA estimates that there are around 250,000 angels in the
U.S., funding about 30,000 companies a year. So, how do you
hook up with one? Not an easy task, unfortunately. It comes
down to networking. Start by talking to professional and business
associates - they will often know someone who knows someone
etc.. Also, check out ACE-net if you're prepared to sell a security
interest in your company. It's an internet-based listing service for
securities offerings of small, growing companies. The website is
you're in the big leagues now. Generally you're in the ballpark
of millions (of dollars that is) rather than thousands. Venture
capital firms look for their return on investment from capital
appreciation rather than interest (unlike banks, for example).
They're generally looking for a return of 500-1,000% on exit.
It won't surprise you to learn that venture capitalists are particularly
leery of internet-based businesses right about now and not
surprising. It also serves them right. But if you have a solid
business plan and strong growth potential, this could be an option
for you longer term.
One of the common concerns about this form of financing, however,
is that you may have to part with an unacceptable amount of
control over your own business. In return for their risk, venture
capital firms will usually want some control over how the business
is run and a say in business decisions. A venture capitalist will
expect a seat on the board, for example.
It's important to remember, though, that it's in the venture
capitalist's best interests for your business to succeed, so giving
up some control in exchange for outside expertise may well be
something worth thinking about.
To find venture capitalists, get a hold of "Pratt's Guide to Venture
Capital Sources" for a listing of 1,500 or so including names,
contact details and areas of interest. Of course, you'll find no
shortage of information online as well.
For most readers of this article, your best bet would be to start
out by investigating the various loan programs offered via the SBA
(or your country's local equivalent). But don't overlook more
obvious, close to home sources first. If you have family funds at
your disposal (for example) and you're confident that your
business will succeed (and unless you're confident about that, don't
get into debt with *anyone*, let alone family members), better to
start out slow and ease into outside sources of financing as your
business (and, more importantly, your business's cashflow) can
support it. After all, Uncle Jack is much more likely to be
understanding about the occasional cashflow crunch than Uncle
** Reprinting of this article is welcome! **
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Elena Fawkner is editor of A Home-Based Business Online ...
practical home business ideas for the work-from-home
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Are you worried about cookies? Don't have enough milk to
go with them? Okay, short of making a trip to the grocery
for more milk, here's how to ensure nobody sees your cookies.
The cookies.txt file is where 'cookies' from websites are
stored. Make this file a 'read only' file, and leave your
browser set to accept cookies. Just search your hard drive
(press F3 after clicking once on the dekstop--F3 brings up
the Search window) for 'cookies.txt', right click on the
file that's found, and be sure the 'Read Only'box has a
check mark in it. Your browser will accept cookies, but
the site that planted the cookie won't be able to read it.
Not sure WHY you would want to do this, but, if you're
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Tips by Tom Glander and Joe Robson of The Newbie
Club. The best Newbie Site ever to hit the Web.
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A Home-Based Business Online
Contact By Email
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