When it comes to financing a business, in particular a start-up, everything can seem a little daunting. Generating finance to get your business idea off the ground can seem nigh on impossible but what the average innovator does not realise is the sheer amount of financing available to them depending on their circumstances. The aim of this post is to shed light on these finance options and hopefully help you get your business off the ground.
Finance Options Credit Cards The most common type of finance used by businesses. It might seem a little odd just how popular credit cards are with all the other types of finance available however it does boil down to one simple fact. Credit cards allow expenses to be paid back within a credit free amount of time (usually 30 days). This is incredibly useful for businesses when it comes to managing their cash flow and why it is the number 1 choice. Personal Finance Personal finance is not just having a large sum of money in reserve to facilitate your start-up business need (though it can be!). You can also look at all your other personal assets that can be leveraged. Re-mortgaging is a popular form of personal finance that gives budding entrepreneurs the funding they need to lift off their business dreams. Another vital asset that new entrepreneurs have is their own personal time. By working longer hours and completing multiple roles within an organisation without the need for the pay eliminates the need to hire employees to fulfil that role. Of course, not all individuals have the luxury of foregoing a wage which is why other forms of finance are utilised. Government Grants Government grants might be one of the most under utilised methods of finance for a start-up business. I know when I was younger and a newly minted director I did not even think of applying for a government grant for my business, yet the help does exist. As of writing, there are currently 166 government schemes available within the UK for businesses to take advantage of. 129 of these government schemes are for start-ups (have been trading for less than 2 years). 68 schemes are for finance and loans. These schemes can be found on the government website. Business Loans A business loan is another possible avenue of financing for new businesses. Applying for one does have some caveats. A strong personal credit score combined with a solid business plan (link other blog here) can go along way to helping secure a business loan however there are other avenues as well even with a poor credit score. Assets can be used as collateral to secure the loan you need. Crowdfunding Crowdfunding is another source of financing a start-up business within the UK. With the soaring popularity of online platforms such as Kickstarter and Indiegogo, crowdfunding has been normalised as a means of raising money for worthy causes and worthy businesses. One of the common myths of crowdfunding is that you simply pitch an idea and, if that idea is good enough then individuals will part with their hard earned cash. And this is what happens but there must be an incentive put in place. Simply Business states that there are four types of crowdfunding:
Decide which crowdfunding campaign you want to run and get investors today!
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