In growing your business, there are times that you will need to expand which may require finance.
You may not be able to raise the money yourself hence sourcing for financial support can be necessary.
Here are 5 ways you can get finance:
- Personal investment:
Starting your business will usually begin from your savings except when you’re lucky to get help from family and friends.
Starting with your investment enables investors to see you as a committed person on a long term and your ability to take risks.
- Bank loans:
Bank loans are the most commonly used source of funding for small and medium-sized businesses. Banks usually offer different advantages, whether it’s personalized service or customized repayment. Though banks may want to see more proof of the genuineness and profitability of your business but it is still necessary to approach them if you find packages that can work for you.
Sometimes, bankers look out for business with sound record and excellent credit record.
A good idea is not enough; it has to be backed up with a solid business plan. Start-up loans will also typically require a personal guarantee from the entrepreneurs.
3. Government grants and subsidies:
Government agencies provide financing such as grants and offers that may be available to your business. Researching on opportunities can help you. Very soon, we will be sharing grants opportunities that are available for you.
4. Love Money:
BDC shared about love money as a money loaned by a spouse, parents, family or friends. Investors and bankers considers this as “patient capital“, which is money that will be repaid later as your business profits increase.
When borrowing love money, you should be aware that:
- Family and friends rarely have much capital.
- They may want to have equity in your business.
- A business relationship with family or friends should never be taken lightly.
5. Inc.com shared about attracting an Angel Investor:
When pitching an angel investor, all the old rules still apply: be succinct, avoid jargon, have an exit strategy. But the economic turmoil of the last few years has made a complicated game even trickier. Here are some tips to win over angel interest:
- Add experience: Seeing some gray hair on your management team will help ease investors’ fears about your company’s ability to deal with a tough economy. Even an unpaid, but highly experienced adviser could add to your credibility.
- Don’t be a fad-follower: Did you start your company because you are truly passionate about your idea or because you want to cash in on the latest trend? Angels can spot the difference and won’t give much attention to those whose companies are essentially get-rich-quick schemes.
- Know your stuff: You’ll need market assessments, competitive analysis and solid marketing and sales plans if you expect to get anywhere with an angel. Even young companies need to demonstrate an expert knowledge of the market they are about to enter as well as the discipline to follow through with their game plan.
- Keep in touch: An angel may not be interested in your business right away, especially if you don’t have a track record as a successful entrepreneur. To combat that, you should formulate a way to keep them in the loop on big developments, like a major sale.
Do you currently need funding for your business? What attempts have you made on it? .