5 Awesome Ways To Raise Capital For A Business
One of the mist difficult tasks, for any entrepreneur that wants to start up their own business, is to raise capital for it. Capital here, is the amount of money the business has available to spend on various business activities. Raising capital is never an easy task and often requires a lot of determination and patience. There are number of ways that an entrepreneur can raise capital for there small business. However, before using any capital collection means, always remember to have a business plan to show to your investors. A business plan states the nature of the business, the objective, the mission statement, the business goals, costs, expenses and staffs.
Below are 5 Awesome Ways To Raise Capital For A Business.
• Friends and Family
Funding from friends and family is a very popular and effective way to round up some initial capital for a business. Those closest to you are more likely than anyone to believe not only in your vision, but your ability to make that vision a reality. However, it may create a negative impact if your friends and family invest in your business. Should your startup fails, there may be problems in the relationship you have with them.
To ensure against these situations, it is advisable you are very clear about any risk involved upfront and not spin tales of profit that may be to good to be true. Also, only borrow money from people who you feel can afford the loss.
• Crowd Funding
While crowd funding is still in its early stage as a means of raising capital for startup, its popularity is rapidly increasing. crowd funding takes it name from the fact that your project is funded by the public using their own personal funds. To start with, you propose the idea that you which to see funded. People can the choose how much or little they want to give you. Most crowd funding sites currently use a reward base model where people who invest in a new business venture are given some form of reward such as the product that is going to be produced.
Some of the best crowd funding sites for small business include kick starter, fundable and so on.
• Loans From Angel Investors
Angels investors are normally regarded as individual – centric investors since they invest a lot on the individual’s ability to drive a business to success. They ate more focused on the growth, instead of earning big profits. You can grab this opportunity and borrow from them to raise funding for a startup business.
But just remember that Angels are professionals that need to see a proper business plan before they will even think about investing.
• Get A Bridging Loan
Bridging loans ate a specific category of short-term loans that are often easier and less stressful and wicker to get than most traditional loans. They cover the financing of bricks and mortar buildings for offices, shops, stores, properties, as well as machinery, tax bills, insurance premiums etc. Groups like Jubilee2000 still specialize in providing loans to startups and small businesses that may not otherwise have access to funding.
By working with a team of reputable money lenders, they are able to make arrangements for projects that traditional banks may hesitate to fund.
One great way of generating capital for a business is to contact a bank for a loan. Most banks would be happy to provide loans to individuals provided their credit rating and history is good. In addition, banks will also need to see the business plan and expected expenses and sources of revenue before they provide the loan. Once the loan has been provided, you must pay it back to the bank with an interest.
Finally as you can see, there are a number of ways to raise capital for a business. All it takes is the right course of action, a solid business plan, great determination and patience.