Any business, large or small, needs funding to get off the ground. How to find funds for business premises, office furniture, tools, and promotion, to name a few! Bottom line, your new business has to function and it has to look professional – This can be expensive to achieve.
Here are five ways to find the finances you need to get your new business off the ground.
1 – Personal Savings
Using your personal “rainy day” savings is an option. This can (somewhat understandably) make people feel financially vulnerable: To which many opt for alternative ways to raise money leaving their savings as ‘backup’ if things should make a turn for the worse. The transition to self-employment and it is important to understand that even when your business is up and running it may take time to reap any real rewards. In the meantime, savings can give security.
2 – Finding Investors
Basically, investors buy a stake in your company. They give you £x amount and you give them x% of profits, based on the amount they invest. Think of shares. Investors can be found through friends and family, investment banks and fund managers.
3 – Business Loans
Just about every bank in the UK has a special offer on business start-up loans. These are repaid monthly and subject to interest like any standard loan. If it is a new business venture the British government also has some loan and grant offers you should certainly take a look at.
David and Sheila Green wanted to set up an online furniture upcycling business and were thankful for obtaining a start-up business loan from one of their local banks. Using their property as security, they now run a very successful online business.
4 – Government Business Loans & Grants
Loans – UK Government start-up loans can range from around five hundred to twenty-five thousand pounds.
Non-repayable Government Grants – The Government has a special fund which new business owners can apply for. These start-up grants do not have to be repaid. Each application is accessed and there are different grants for different business sectors. Find out more here . Your eligibility and how much you receive will depend on many factors – Nevertheless, certainly an option worth investigating.
The newest way to fund just about anything! There are specialised websites that allow people to put up their project/goal/business/charity (Kickstarter and GoFundMe for example) and others will provide funds to back them. You can choose what they get in return – Products, intellectual rights, shares, etc – Unfortunately, if you do not reach the set target no funds are released. Even so, Crowdfunding does work well for some start-up companies.
Funding a new business can seem like an unmovable mountain. However, the quicker you get your thinking cap on and start working on the options the smaller that mountain will become.