Starting a business is a challenging mission. Depending on the type of business you have in mind, the financial implication may be too much for your pocket – and most small business start-ups and running meet this brick wall almost every day. When this happens, the first thought that comes to mind is taking a loan.
Have a plan to repay every loan
Anyone that offers a loan to a small business or a start-up company may seem like a messiah. In the midst of the euphoria, they may be tempted to take more than required or spend it without a plan to pay back and thus, they run into troubles bigger than the initial one. If a financial institution has ever been on your neck to repay a loan, you will understand this statement better.
Waiting for government grant may not work either
Government grant is usually limited to professional industries and though rarely meant for small businesses but when they do come, the competition is usually stiff. Waiting for grant as a source of finance is not always realistic.
Loan should not always be the first resort
If you have ever stop to consider the various other means by which money can be generated without much legal implications, you will be quick to conclude that loan should be the last kind of money you would ever want to take.
Your savings are a good starting point
Before looking left and right for money, look inward. Your savings can be the best source of your business finance and since it is your savings, you owe no one any apology if the business should ever fail. Beyond your savings – if it is not enough – you can ask your family and friends. They will show more empathy if by any reason you are unable to pay back more than any financial institution.
Customers can finance your business
If you have a unique or outstanding service, customers may be willing to make payments in advance. This payment you can use to cater for their services instead of the money coming from your pocket. Suppliers can also give you an invoice on supplies to be paid at a later date. This is more like an interest free loan and a very good source of financing your company.
Crowdfunding is a new form of getting fund
Crowdfunding may seem crazy but it has worked for several people and is still working. In Crowdfunding, you display what you want to do online and people who share in your vision can donate to the course. In the end, the money is yours. It is more like pre-selling your product and you have to bring it out in the clearest of ways if you must make a success.
You can lease out what you have
If you have equipment or a property that can be of worth, you can lease them out. The rent you will be paid would go a long way in helping to finance your business. On the other hand, you can decide to sell off your belongings which you do not need or use frequently to raise funds for your business.
- Loan is the first source of funding many business starters consider.
- The troubles that come with loans are numerous and not always worth the trouble.
- Make a good plan to repay every loan and early too.
- A government grant is not something to wait upon to start your business.
- More new crowdfunding can help you start or fund your company.
- Family and friends are better sources of loans.
- Family and friends will be more considerate if your business should fail.
- Customers who pay ahead are indirectly funding your business.
- Supplies from companies to be paid at a later date are like an interest free loan.
- Selling the things you are no longer using can help you raise money.
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