If you recently opened or are considering opening a travel agency, securing funding may be harder than you think. The goal isn't an impossible one, however. Discover five realistic ways you can fund your own travel agency.
Dip Into Your 401(k)
Image via Flickr by Tax Credits
If you have a 401(k) through your present employer or a previous employer, you could consider dipping into your retirement savings to start this new venture.
Since your 401(k) is your retirement or safety net, you want to have a sound business plan for your travel agency before considering this option. Enlist the help of a tax attorney or business to help make sure you don’t misstep with the IRS.
Take Out a Small Business Loan
Plenty of brick-and-mortar banks and online companies offer small business loans, which can help to start your travel agency. Small business loans are convenient and typically straightforward, but they usually come with bigger interest rates than other options.
You often need to secure your loan with an asset. When you take out a loan in your name, you assume the risk of that loan. Similar to using your 401(k), you don’t want to make this decision lightly.
Discover Options for Less-Than-Perfect Credit or High-Risk Ventures
Your credit doesn’t have to be perfect to launch your business successfully. In fact, you can get a small business loan if your credit score is less than 500.
Once you start your business, work with companies that are willing to cooperate with people who have less-than-perfect credit. You can also get a travel merchant account. Since travel agencies are sometimes considered high-risk ventures, this account can help you increase your revenue to repay loans.
Gain Support From Family or Friends
If a friend or family member has extra cash, a trust, or an inheritance, this option is typically the easiest way to secure money to start your travel agency. Mixing friends and money is always somewhat risky, so tread carefully.
If you’re not comfortable asking a friend or family member for a loan, you could consider asking for an investment that will hopefully pay off when your business grows. You could also ask friends to go into business with you if they are also interested in the travel industry or believe in your vision and want to be a part of your dream.
Get a Side Job or Extra Income
Although not always possible, taking on a side job to get extra income could also fund your passion for starting a travel agency. Many contractor options are available that give you freedom to work your own hours.
If your car is in good condition, consider driving for Uber or Lyft on the weekend. If that idea doesn’t interest you, look into all other potential money makers to help you save up to open your travel agency and earn extra income after your organization launches.
Although starting any business is challenging, launching your own travel agency is certainly not impossible. Get creative with your funding opportunities and take advantage of each possibility to get your agency up and running.