Raising Finance For Starting Or Buying a Business

The most important thing is raising business finance once you have thought of a new business idea. An idea is just like a seed. You need to grow the same by raising the business finance to buy equipment or establish a workplace or even manage marketing. There are many ways through which you can arrange for money when you intend to start any business. You may borrow some from a friend, family member, or financial institute as per your needs.

Guide To Arrange Start up Funds For Business

* First, find out how much you need to invest in the business. Then check your savings. Starting your business might be risky; hence you need to arrange for the capital very wisely. Never use the retirement funds.

* Approach your friends or family members to arrange money for investment. But ensure that you make business agreements even while raising business finance from them also.

* You can also approach venture capitalists to arrange for venture capital. They contribute the money for new companies but ask for higher returns. But they usually lend for very big projects.

* Try to get the loan from a bank. Various loans facilities are available in different banks. Banks usually check for the history of the company for which you intend to borrow the money. Since you intend to start a new business, you can begin with small banks.

* Approach angle investors. Angle investors are those who intend to make more out of the capital they have invested. They act as investors in your business and also provide guidance for it.

* You can use credit cards to obtain funds. You should use this option only if you do not get funds from anywhere else. Although nowadays various people who are starting a new business use credit cards for raising business finance.

* You can even place an advertisement on the Internet or in the newspaper, citing the business for which you want the funds. The advertisement that you place should tell in detail the plan for your business and amount of funds needed by you.

* Another important way for raising business finance is to borrow money from life insurance. You can obtain loans against various policies.

* Various states also have Business Development Commissions. They help in the establishment of new business. They along with business expertise also offer money for starting new business.

Before you actually start raising business finance, take care of the following points:

* You must have detailed business plan ready in your hand. As when you approach investors for funds, they will like to see your business plan. Only if they like the same will they invest in your business. Hence ensure that you have detailed business plan.

* Always be confident in front of the investors and show them that you will do what you intend.

* You may intend to make a person partner in your business who has given you money. But before doing so, ensure that you can work with them.

Raising Start Up Capital For Your Small Business

You have your business idea, your business plan in tow, your ducks in a row, and you’re ready to get your business off the ground except for one problem – you have no start up capital. Unless you were born into wealth and have it at your disposal, then you are like most small businesses and need a helping hand.

How can you raise start up capital? There are a few ways to go about it:

Small Business Bank Loans

Many financial institutions provide some type of small business loan program. In order to get funding from a bank for your small business, you will need a solid business plan. You’ll have to prove that your business will generate enough cash to make the loan payments. Each bank’s requirements are different but if you are able to articulate how you will succeed, have decent credit, and possibly a co-signer, you may be able to secure a small business bank loan.

SBA (Small Business Administration)

The SBA is a great resource that provides information on requirements, credit factors, how to apply for loans, etc. The web site is a good starting point before attempting to apply at a bank. The better prepared you are, the easier it will be when you begin the application process.

Family & Friends

A lot of small businesses raise start up capital this way. Family and friends usually want you to succeed and believe in your business. It is wise to treat these relationships as real business relationships. Plan how you will repay their loans, the time frame, and at what interest rate.

Angel Investors & Venture Capital Firms

Private angel investors and venture capital firms work primarily in the same way. They invest in the equity of your business and expect a return in the form of an acquisition, IPO, or stock buy back in the future.

The key to any of the above methods is to have a well written business plan. A good business plan will prove that you are serious about your business and that you can demonstrate the way you plan on making it successful.

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