Funding is one of the first things you must consider when you decide to start a new business. Obtaining the right funding will help you build a strong financial bedrock for your company, which in turn, will allow you to build your business free of cashflow burdens.
How you choose to fund your business will make or break your chances of turning over a profit in the future. It is for this reason why you must refrain from entering into an agreement with the first benefactor that you come across. Take your time, be meticulous when exploring your options, and strive to find the type/level of financing that suits you and your organization.
Here are three sources of capital that you should seriously consider if you want to give your business the best possible start in life.
Personal investment
If you can afford to bankroll your business venture yourself, go ahead and do it. Whether you use cash or collateral, this is one of the most straightforward funding routes you can take. You won’t have to worry about getting any sort of approval. You won’t have to agree to lots of payback polices. You’ll simply inject your money into the venture, and you’ll be free to push forward with the growth of your company.
A similar route that you can take in this instance is to ask your loved ones for financial assistance. This could entail asking them to borrow you the amount you need to get your company up and running, or it could mean going into business with them as a partner.
Small business loans
Can’t afford to finance your business by yourself? Don’t worry, as you could take out a small business loan instead. This convenient and easily accessible type of funding will allow you to inject much needed cash into your enterprise without having to worry about your profits being snatched away from you.
Your lender won’t attempt to influence how and where your money is spent, which in turn, will allow you to retain complete control of your company’s growth. Oh, and the interest rates that are generally attached to small business loan rates are notoriously reasonable!
As stated by biz2credit.com in their practical guide to small business credit, here are the six most popular loan types that you should be aware of:
- SBA Loan
- Business Line of Credit
- Equipment Financing
- Merchant Cash Advance
- Unsecured Business Loan
- Business Acquisition Loans
Government grants
Some government agencies, those at both federal and provincial level, make special grants and subsidies available to local businesses. Your company might very well qualify for this type of assistance, so it’s worth checking out your governing body’s official website to get a better idea of the support that they provide. If you don’t take the time to research what grants you qualify for, you could end up missing out on the perfect funding opportunity.
When you decide to take on the all-important task of financing your business, be sure to consider the three sources of capital listed above.
