Using Personal Savings to Start Your Business


You, the aspiring entrepreneur, frequently have three sources of getting money to start your business: (1) personal savings, (2) friends and relatives, and (3) other individual investors. Using personal savings to start your business to start your business will now be discussed.

Using personal savings to start your business

Using personal savings to start your business is most frequently used by prospective business owners. However, most of us probably don’t have enough savings to start our business properly. For that reason you need to do a thorough inventory of your assets. You are likely to uncover resources you didn’t even know you had.

Assets you may have can be savings accounts, equity in real estate, retirement accounts, vehicles, recreational equipment and collections. You may decide to sell some assets for cash or to use them as collateral for a loan.

There are a number of ways that you can consider to generate start-up cash to open your business (Entrepreneur Press):

  • Investments – low-interest-margin loans against stocks and securities can be arranged through your brokerage accounts;
  • Your home – consider getting a home equity loan on the part of the mortgage that you have already paid off. Depending on the value of your home, a home-equity loan could become a substantial line of credit;
  • Life insurance policies – you can use the value built up in a cash-value life insurance policy as a ready source of cash;
  • Your retirement plan – some retirement plans allow members to borrow up to 50% of your vested account balance. However, the loan has to be repaid in a short period of time;
  • Moonlighting (if you’re employed) – ensures you’ll have some steady funds rolling in until your business starts to soar.


Lastly, before investing all your savings and collateral in a new business, you need to know that the business has the potential to survive and grow. Therefore you need a business- and marketing plan to give you direction and to get customers to your business.

Remember, you need a well researched and written Business Plan to get your business off to a good start!

Read also:

  1. Why do you want to start your own business?
  2. Bootstrapping – starting a New Business with Your Own Money
  3. Getting Money for Your Business – Other Individual Investors
  4. Borrowing Money from a Bank to Start your Business
  5. Getting Money for Your Business – Other Individual Investors


Published by

Douw G Steyn

Management consultant, blog writer, dreamer

21 thoughts on “Using Personal Savings to Start Your Business”

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