Nearly every day, millions of people around the world wake up with new business ideas. The rate at which people are starting their own businesses is encouraging. A recent report indicated that close to 550,000 new businesses registered with Companies House in 2013. A greater percentage of those numbers, 95%, were small businesses and startup ideas registered by individuals.
Although there are many other start funding ways in which you can collect money for your business. Such a process is called bootstrapping. It is a great method as self-financing, that means, to draw amount from your savings and invest in your business.
That tells you something; many people are daring it alone. For those considering this option, funding business ideas at the initial stages have proven to be a tall order in the past. Luckily, such people can explore multiple funding options thanks to the current financial system. So what are some of these options?
How to Find Fund for Startup Business:
1. Crowdfunding:
Traditional forms of financing start-ups might be popular but they are fighting it off with new opportunities like harnessing the crowd. Presently, several crowdfunding sources are available.
This way, consumers are able to get funds from different people even as they pitch their ideas and display their competitive advantages. In the past, such sites have managed to raise up to £500 million for investors.
If embraced appropriately, crowdfunding can go a long way in funding business ideas. While individual investors might provide low cash levels, say $20, the collective amounts of several investors are possible to offset the financial needs of a start-up.
For several years, renowned sites like Crowdcube have helped a lot in enabling investors to purchase equities into companies in need of funding. For a business with better prospects, you can be sure of seamless funding if you are able to manage successful pitching.
In the process, the investor gets a promise of making gains if the business materializes into a profitable venture. For small businesses that are just getting off the ground, such opportunities are worth exploiting.
2. Angel Investment & Winning Contests:
This investment is actually individuals with surplus cash in search of startup funding. Their main motive is to have a share in your business if it makes an optimum profit.
Sometimes, they also mentoring while they also help you in collectively screening proposals before investing. One of their obvious drawbacks is offering less money than an actual organization for startup ideas.
Some of the renowned companies to take the help of Angel Investments are Google, Alibaba, and Yahoo.
This one is totally unique and kind of a tricky startup funding idea. You can totally leave it on the luck and try and win a contest or a lottery so that you can get funding for your startup.
Increased number of funding business ideas companies have really made it possible for small startups to become an actual entity. There are other quick ways for funding and they are:
- Pre-selling products
- Selling valuable antiques and assets
- Signing for govt programs
- Credit cards
- Small term loans from micro financers
3. Venture Capital:
This is another form of fundraising with closer ties to crowdfunding. In this case, however, a group of investors offers debt-free financial support to a start-up in exchange for equities in the company.
The venture capitalists are individuals who are willing to support great business ideas with hopes of getting returns when such startup ideas make profits. Depending on the percentage of ownership you will be giving away, the venture capitalists can end up having significant control over your business.
To get such funding, one needs good pitching coupled with a workable business plan. In addition, you need to have realistic financial projections. Before taking such offers, however, it is important to note that venture capital firms are more likely to take active roles in the management of the business. As such, you need to strike a deal with a firm that guarantees greater support beyond funding business ideas.
4. Bank Sources:
It is easy to assume that your bank will turn you down if you are in need of business funding. Actually, many entrepreneurs think of other sources when looking for start-up funding with their personal banks being the last resort. It shouldn’t be so. Currently, several banks are willing to work with start-ups.
Banks aren’t just for mortgages. In the past, they have proven to be effective lenders for both small and medium-sized enterprises. That is something worth taking advantage of. With a good credit score, your business can receive a massive financial boost from the banks.
To be able to benefit from such funding sources, you will need a good business plan together with financial projections. Most banks help their clients to work on this so that shouldn’t worry you off. As long as your business meets the lending criteria, many banks will be willing to provide loan facilities and overdrafts.
The deal gets even sweeter with recognizable banks like Metro Bank that offer special benefits to entrepreneurs including personalized advice and even free banking at the initial stages. Who wants to miss that?
5. Loans and Grants:
For centuries, start-ups have thrived on loans. It is not like the trends are about to change. Applying for a loan is an easier and quicker way of raising funds to finance one’s business. Entrepreneurs with great business ideas can benefit from government Start-Up Loans.
With a repayment period of up to 5 years at 6% annual interest, this is a great deal. One awesome thing about government loans is that entrepreneurs not only benefit from the funds but also free advice.
Worth noting, however, loans aren’t just restricted to government facilities. Several organizations and financial institutions offer massive support to entrepreneurs. From debt consolidation companies to micro-finance institutions, the list of startup funding organizations is endless.
In most areas, you will even find local authorities with established funds for innovations and startup ideas favoring such areas. It is also possible to take advantage of certain blue-chip companies to offer help.
Several start-ups fail to see their glory days because of inadequate funding during the initial stages. With so many funding opportunities to exploit, from traditional bank loans to crowdfunding, business failure due to inadequate funding shouldn’t be an option.
Also, let us know whether this blog on funding business ideas was helpful to you or not by leaving a comment in the comment section below.
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