HOW CAN I RAISE MONEY FOR MY BUSINESS?
If you’ve got a new business, probably the most important thing on your mind is how to raise money for it. With so many options available, you might be wondering where to start. Here are a few ideas of how to raise money to get you on the right track.
Banks are probably your first consideration. They can offer business loans and overdrafts, as well as other forms of financing. However, you’ll usually have to offer security which you may not have, and even if you do get a loan you’ll be charged interest and will have to stick to strict repayment schedules.
Friends and family can also offer finance. They’ll probably be more lenient than banks in terms of repayment, but bear in mind that money often comes between friends, so thoroughly consider all the options.
Business grants and loans from specialised sources (e.g. the government) are another option. But, these will often come with strict criteria any may not provide the level of finance that you need.
By far the best option to consider is raising money through private investment. Business angels, for example, can offer a higher level of financing than you can obtain from the previous options, and provide a whole host of advantages. They not only bring their money but their expertise as well, and often being entrepreneurs themselves means that they have a wealth of knowledge that they can impart onto your business. They’re not adverse to risk and will often go for start-ups with no track record as long as there’s potential for growth. High-growth businesses result in profit, expansion and as a result, a high return on their investment.
Venture capitalists can probably offer the biggest level of financing. They’ll often work in networks to pool their resources, and will too bring their expertise and experience based on their own success. They rarely invest in start-up as they need to see a track record of success, but as long as you’ve got a high-growth business that needs an extra push, you’ll be considered.
As you can see, you can raise money for your business in a variety of ways. Which one you decide is up to you, but you’d be wise to consider private investment, not only for the money but the support as well. With this, you’re far more likely to succeed.
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