By financen | January 31, 2018 - 4:39 pm - Posted in Business, Funds, Small Business

The main concern with any startup or small business is financing it. There isn’t one approach that everyone can use to get their business up and running rather there are several different routes, businesses can take to finance their project depending on the type and size of the project and the amount needed. Small businesses and startups have even been known to piece their funding together through different sources phased out over time which is a viable option for some. So here are four practical ways to fund your small business.

Personal Savings:

Nobody just gets up one day and decides to start up a new business. There are several hours of ideas and planning behind it so there’s more than likely chance that you will have some savings collected somewhere as you’ll already have an estimate on how much finance is required for your business to break-even at least. Using those savings to fund your business can be the key to your startup becoming profitable as soon as possible since you won’t have to worry about monthly repayments like you would have if you would’ve borrowed from a bank or repaying the loan with a hefty interest rate.

Although realistically, the chances are that you won’t have the entire amount needed to start your business saved up so in that case selling the items you do not need is an excellent option. If you were to look around, you are likely to find items that you barely use, if ever, that could be worth a few hundred dollars and if you were to sell those items and raise the money that way, you’d make sure that you’re keeping 100% equity of your company because you won’t have to sell shares to raise the finance.

The Bank:

If the first option isn’t for you, then securing a loan from the bank is still one of the most practical ways to fund your new business. Getting a loan from the bank isn’t an easy job and you will have to have prerequisites if the bank is to lend you the money. These prerequisites include a healthy personal credit score and a detailed business plan that some business might not have, but once you’re able to secure the loan, it can be essential for business for getting you the maximum yields. That is because if the loan is secured, not only the bank won’t have any issue on how it’s run and you’ll have 100 percent of the business equity to yourself, but you’re also guaranteed the money for the whole term.

Crowdfunding:

Crowdfunding means putting your idea forward on the internet and asking like-minded people to donate you the money, and it is a way that won’t cost you anything. With now successful startups like Ouya and Bitvore getting funded because of crowdfunding, there’s a good chance that you’re business idea will also be funded provided it is a practical and a credible one that people can get behind.

Venture Capitals:

There are firms that will fund your business completely in its early days, and you won’t have to worry about finances so you can completely focus on running your business. However, these firms are expected to have a huge part of your business equity in return when it’s profitable. This option might not be for everyone since you risk losing control of your company, but sometimes it is the most practical way to fund a business.

Author Bio: David

David Simmons is a financial analyst and accounting expert. He has in-depth knowledge about setting up small businesses as well as creating profitable investments. He regularly contributes articles related to business and loans at https://www.ebroker.com.au/.

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This entry was posted on Wednesday, January 31st, 2018 at 4:39 pm and is filed under Business, Funds, Small Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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