More than a quarter of millennials are padding their pockets by working on the side, according to a new study. The survey of millennials, those between the ages of 18 and 26, found that on average they’re making at least an extra $200 a month from side jobs in addition to their regular income.
Having a side-hustle has become much more common; forty-four million American adults claim they have a side gig, according to the survey. The American Dream isn’t just limited to 9-to-5, and among millennials it seems these gigs are more than just a way to earn a few extra bucks in spending money. The study showed that 61 percent of millennials working a side job are making money off it once a week or more often, and 96 percent work on their side gig at least once a month. But what’s keeping these passionate entrepreneurs from quitting their day jobs to turn their side hustles into successful full-time operations?
More often than not, it’s lack of seed money that keeps entrepreneurs from striking out on their own. While you can stash the extra cash you’re bringing in through your side gig, it may not be enough to fully launch a business pursuit. The first step is the hardest one to take, and a business loan can give you the cushion you need to confidently pull the trigger on turning your second job into a full-time venture.
Once you’ve proven your business idea’s viability, and you have a solid plan, decide exactly how much you’re willing to invest. While taking on debt is necessary to scale your venture, growing slowly is the way to go. Consider these business loan options for taking your side hustle to the next level:
SBA loan: There are numerous startup loan options for getting off the ground. The U.S. Small Business Administration (SBA) establishes guidelines for and guarantees a portion of its startup loans. While there are many types of SBA loans, SBA 7(a) loans specifically offer bank quality rates and terms while being versatile enough to use for startup funds, equipment, purchasing real estate and more. If you’re looking for less than $50,000, the SBA Microloan Program also offers startup business loans with low interest rates. Keep in mind you’ll likely need a credit score above 680 to qualify for an SBA loan.
Business credit cards: Similar to a personal credit card, a business credit card can be used to fund just about any expenses. It’s an excellent option if you don’t qualify for a traditional small business loan but still need access to working capital. Business credit cards are ideal for start-ups or new ventures because they’re quick and easy to get, and the benefit lies in the fact that you have a set amount of credit, but you don’t necessarily have to use it all.
Equipment financing: If you need equipment to take your side hustle to the next level, an equipment loan is a secure option. It’s quicker to get than asking for capital outright, and it allows you to keep cash on hand for other business expenses. Equipment loans are similar to auto loans, where the purchased items act as collateral, and the types of equipment loans are diverse to fit your specific needs.
If you’ve already turned your passion from a hobby to a successful side-hustle, you may be ready to further monetize it. With a dream and a plan, plenty of enthusiasm and some working capital on your side, you’ll be armed to transition your side project into a full-fledged, profitable and scalable business.