One of the biggest worries which people have before they start a new business is that of funding, and looking at where they can get their hands on the necessary finances to get themselves off the ground. This is actually much easier than it appears and there are many places where new business owners can go to secure the funding that they need. My good friend Michael Rom works for Sertant capital, a company which provides funding for equipment, and he has shared some tips which you can use to get the money that your business needs.
Before You Start
Before you go out and start seeking funding you have to invest a lot of time on a watertight financial plan. Within this you should have the costings for every aspect of your business, you should know exactly how much money you are looking for and most importantly, you should have a clear plan for exactly how you will spend the money. Failure to do this means that no matter where you go, you won’t be able to secure the investment which you need.
Business and Personal Loans
The most tried and trusted way of securing funding for your business is to go to the bank and get either a personal loan or a business loan. In the case of a business loan you will normally have to put something valuable up as collateral, but you can anticipate reasonable terms and conditions of the loan. A personal loan will mean that all of the funding is in your name rather than the business, and you are unlikely to get better terms than if you get a business loan.
Angel investment or Venture Capital involves the selling of a stake in your business in exchange for financial investment and it is a great option for many startups. Unlike a loan, an investor requires your business to do well so that they can get a return on their money, and that means that they are going to invest time and experience into your business in order to help it achieve its goals. Naturally you will have to give up a percentage in your company, but if the investor helps you to reach success then your small percentage with them is likely to be worth far more than your 100% without them.
Many young businesses seek to get their company off the ground by bootstrapping, which essentially means doing it on your own. This cud involve using credit cards, borrowing from friends and family, using savings or even seeking crowdfunding support. This is one of the cheapest ways in which you can secure funding for your business but it is something which will require a lot more hard work on your part. If you believe in your project however, it is a great way of launching it in a responsible way.
There are many options out there, get a plan together and go get that cash.