7 ways to finance your business

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7 ways to finance your business

7 ways to finance your business

All businesses will need financing at some point and finding the right type for your company will be a challenge. Funding comes in many forms and over the past decade the options for raising money have changed drastically.

  1. Personal loans

There are many quick loans available on the high street, some of which are great for a quick cash injection in an emergency. If you have a car that you are willing to put forward as collateral you can borrow up to £50,000 from Car Cashpoint. They will give you a loan against the second hand value of your motor vehicle and will set a period over which you will have to pay back the money.

  1. Crowd Funding

The reasonably new concept of crowd funding is a way in which people, businesses and organisations raise money using online websites or platforms. This can be a way of not only raising funds, but it also helps you advertise your company at the same time. The Financial Conduct Authority (FCA) explains some of the regulations involved in this type of fund raising.

  1. Grants and government loans

The government’s Start-Up Loans scheme was first started to assist young entrepreneurs fund new business ideas, but it has now been extended to anyone of any age needing funding. The Guardian online explains that you can borrow up to £25,000, which has to be repaid within five years depending on your agreement with the lender.

  1. Bank funding

Many small companies or start-ups will automatically think that their bank will turn them down if they ask for a loan, but many banks are starting to invest in businesses due to fierce competition from other areas. These investments can come in a variety of forms, from overdraft facilities to lump sum loans. The better your credit rating the more chance you have of getting help.

  1. Friends and family

The good old bank of mum and dad might not be what you had in mind when you first came up with your business idea, but at least you know whom you are dealing with. As long as you don’t over borrow and you trust in your product there is no reason why this isn’t a viable option. 

  1. Angel investors

The website Small Business UK explains how angel investing works and how it has been used by some of the biggest companies in the world such as Google and Facebook. The system works by entrepreneurs who have already succeeded investing in new businesses they think will be successful. The investors not only help the new company with financial help, but also much needed expertise.

  1. Selling off your assets

If you have any assets that you can sell then this would probably be a good way to finance a new business. This way you won’t owe anyone any money and if you do have problems in the future you could always resort to other methods mentioned. You will be surprised how much you can raise by just selling off old phones or electrical goods.

 

 

 

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