Is Your Business Debt A Bottomless Pit

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If you’ve started a business recently, more than likely you’re in debt. The vast majority of people who go into business have to borrow money in order to get their business started. The money is usually borrowed from a bank or some other type of lending institution.

For those of us who are in mail order, network marketing or some other type of small home based business, the process of obtaining star-up money is somewhat different.

If you’re operating an internet, mail order or MLM business you already know that banks don’t lend money to people who go into these types of businesses. Why? The figures speak for themselves. The majority of people who go into these small businesses don’t last very long, they don’t make any money. If there is no money, banks can’t collect on their loans. Even if you only want to borrow five to seven thousand dollars to get your business started, the bank won’t lend it to you. You are considered a bad risk.

Those who want to work from home in their own business have to find other ways to raise the money to get their business going. So, what’s the answer? Where does the money come from?

Some people borrow their start-up money from family or friends. Some put aside money each month from their regular job until they save enough money to get their business started. Start-up money may also be borrowed from a credit union. A person could also work an extra part time job, or do some other kind of fund raising activity. It may be garage sales, selling at flea markets, or offering their services in any other number of ways to get their start-up money.

If you are starting a mail order, internet, or network marketing business that requires only two or three thousand dollars to get started, you should make every effort to get the capitol you need without having to borrow it. This way if things don’t go as you expected, and your business venture doesn’t work, you won’t have to worry about paying back money you don’t have.

I realize one should go into business with a positive attitude, but we must also consider that things may not work out as we planned them. Something you should never consider doing is trying to start your business using a credit card. Credit card debt is one of the worst kinds of debt that you can get into. Once you start using that little plastic card to get what you need, before you know it you have charged yourself head-over-heels in debt.

If you feel you have enough self control over the use your credit card, this may be an acceptable option. However, don’t allow yourself to get so far into debt that you end up with a bad credit rating because you can’t pay off your credit card loan.



Carefully choosing the means you use to finance your new business is very important, because start-up money means just that, “START-UP”. It’s only money to get you started.

Once you get your business going, what are you going to do if you need more money to keep the business going? Most people who start a home based business don’t have prior experience and don’t understand that the profits don’t start coming right away – if they come at all. This is one of the main reasons so many would-be small business entrepreneurs fail. They think the start-up money is all they will need. When the start-up money runs out and all their financial resources have been tapped, they wind up out of business and in even more debt than when they started.

Being in business and being in debt go hand in hand. You must prepare yourself for the fact that when you borrow money, “YOU HAVE TO PAY IT BACK”.

If you are planning or have already started your own small business, here are some things you might want to keep in mind:

1) Don’t start your business until you are ready. Make sure your start-up money can carry the expenses of your business for at least three or four months, or longer.

2) Prepare a budget, include all of your business expenses, no matter how small. Always keep an eye out for ways to save money on the things that you need to run your business. Don’t buy what you don’t need.

3) Keep accurate records of every penny that you spend. If you have to borrow money to get started, be sure that you have a way to pay it back if your business fails.

If you are a true entrepreneur, you won’t let failure stop you from trying again. However, if you get yourself into a lot of debt, it can be difficult to get things going again. If you’re in debt don’t try to borrow your way out of it. The only real way to get out of debt is to increase income or to decrease out flow. If you have to work an extra job to get your self out of debt, DO IT! If you have to cut back on doing some of the things you enjoy doing to save money, make the sacrifice.

You definitely take a financial risk in starting your own home based business, but if you plan carefully, and spend your money wisely, you won’t have to worry about getting yourself into more debt than you can handle.

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