Got a business idea that you think will work? Now all you need is the funds to transform your idea into commercial success. Here’s a look at a few avenues to get financed. The first is obviously the easiest: Self-finance. If you’ve got the money to start your business and you believe that it will work, you can consider investing your own money into it.
That way, you won’t find yourself needing to repay anyone for the loan – and the high interest rates. You will also be the sole owner of the business right from the start. But not every entrepreneur is this lucky to afford self-financing – or as willing to take the risk. There are numerous other financing options to choose from.
Banks have long been financiers for businesses, including start-ups. Before you go to your branch to fill out a loan application, do some research and find out which banking institution is more favourable towards business loans and start-ups. Then make sure that you have all your documents in a row – your business plan must be flawless because even the smallest issue will give the bank reason to deny your application. The best thing to do here is get your accountant to help you draw up this document as they will know exactly what the banks look for, not to mention being able to crunch the numbers and tell you whether it’s a good business plan or not.
Bringing in a partner/investor is another great option for a start-up. There are lots of people that you could bring in for this method of financing – friends and family, business acquaintances, other businesspeople… the list is endless. What you need to do here is be careful about who you bring in – avoid selling a portion of your company to someone who won’t be interested in anything but the money, nor do you want someone you can’t trust owning part of your business. You will need to go through a rigorous screening process, not to mention have a watertight agreement.
There are also financing institutions that specialise in assisting young entrepreneurs with their business plans by getting their start-ups up and running. Plan ahead, and plan well.
Financing your start-up is possible simply because there are so many options available to you. Take your time and do some investigating – when you’re sure that you’ve found the best one for your business, go for it. You could be in business sooner and easier than you ever thought possible.
Source – BT