If you’re an entrepreneur who wants to start their business with a perfect business idea but the only obstacle that is coming your way is the source through which you will get the funding to start your business, here are a few options that might help you out. You can never start a business without investing some money to cover the cost of start-up before the selling the products and generating revenue out of it.
There are diversified sources through which you will be able to raise funds for your business start-up, but you need to make sure that which of the following option of getting funds will suit your business specific needs and requirements. Here are six amazing financing option for start-up businesses described which might be helpful for you to decide which source of funding you would like to opt for.
1. The Bank:
Going to the bank to apply for a small business loan is a very obvious yet re-known way to finance your new business, but it’s not that easy and simple as it seems. People have to go through a certain process which takes more than 2-3 weeks for the banks to approve small business loan they have applied for. Getting a loan from the bank is for a start-up business is very difficult as banks are not sure about how you will be able to return the loan whether your business runs successfully or not, it’s not the issue of banks they want the money to lend to your business back in time along with the interest rate. Banks also go through your personal financial statements and your personal credit history before approving your loan.
Crowdfunding is another possible to raise funds for your business; all you need to do is to make accounts on the website which are playing an effective role in crowdfunding. These websites for crowdfunding have people on it who are willing to lend money to fund the start-up and expanding businesses, and on certain terms and time period, they will get their money back. More than one person with a certain amount of money will raise the required funds for your business.
3. Venture Capitals:
Many business owners would hesitate to opt for this source to raise funds for their businesses because venture capital firms are always ready to invest in potential business ideas as well as successful business expansion but they are not interested in getting higher return alone, or repayment agreements instead they ask for a certain portion of your business ownership. If you think that you also need strong assistance along with the finances to start your business going to a venture capital firm for funding is the best option. As these venture capital firms have strong industrial relations as well as they have experienced human resource which will prove to be useful for your business operations and other activities.
Every entrepreneur who wants to start their business should first consider funding your business on your own. If you have earned some good money over the period of time through a job or any other source, think of putting it into your business. The benefit of self-financing is that you won’t have to worry about paying high-interest rates to the lenders as well as re-payments to any institute or person. All you need to do is draw up a rough estimation of cost which will incur on to starting your business and then either look for how much you have or save up some money which will fulfill the required funding limit. You can also sell the valuable item which you no longer use or need to use to generate some money out of it.
5. Pledging your future earnings:
If you know that your business idea is the one which will take no time to be the attraction among the audience and will generate higher profit. Then we would suggest you go and convince the investors that you are willing to pledge a certain percentage of your future earning against the loan you will get from the investors.
6. Funding competitions:
Everywhere around the globe there are many competitions going on, who are giving winner prizes in the form of money. The winner prize money is not just a little amount which will do no good to you these competitions offer winner prize money which is usually more than enough to start your business. So, if you are capable of taking part in such competitions and wining it, these are the lifetime opportunities to raise funds for your starting your business.