How to finance your start up business?
Dig into your own resources
Parents and savings equate to ready liquid cash. If you are able to get this amount to spring board your business, you should. Insurance is another good way to find money. Some insurance policies (mostly whole life insurance policies) allow you to take up to 90% of your insurance amount (cash value) as loan. You can use your property as a guarantee to get a loan from your bank. You can also sell your car to finance your business.
Find sleeping business partners aka angel investors
These people are a boon to start-up businesses. Basically these investors like to invest in new businesses due to the potential. If you have a solid business plan and you are hard pressed for a start-up capital or how to go about launching your business, such angel investors love to help you out for a fee. This fee could be share in your business (this type of business relationship is termed as an equity investment) or lifetime consultation fee or any other terms you may agree upon. Do note that you no longer have complete rights to your business but share it with your angel investors.
Finding such investors is not easy. You need to have contacts or you should start making contacts. You can start with your family and friends and let them you are looking for investors. You could find out about Venture Capitalists organizations within your area if your idea or product is according to their requirements
Apply for State Funded Business Financing
If your business is in line with the requirements and falls under the supported business funding, you should consider applying for the business financing available. This way you will not only get the financing you require for the business but also consultation and ideas on how you can move your business forward.
The good thing is that unlike angel investors, you do not have to provide a share of your business. You do have to pay back in interest though. Another good thing about this type of financing is that you do not receive all the money initially. Your approved finance will reach you in instalments or as per your need at that point in time. This way, you will have more hold on your business expenditures.
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