Month: May 2018

Is Equity Funding The Best Option For Your Startup?

To get your business off the ground, as well as keeping it there, you need the cash to do so. Getting this cash can however often be a difficult process and will be made more difficult if you have other commitments already such as a mortgage, car and a family to support.

The traditional route of gaining business funding has always revolved around visiting your bank for a bank loan; however this route isn’t always the best to approach when you are looking for start-up business funding as banks are known to not like providing new, small businesses with money as your business will have no financial history and you will more than likely have no assets on offer to secure the loan.

When starting a new business venture, it is important that you get the start-up funding from somewhere that can provide you with what you need and that you will be able to have a good working relationship with.

One thing that you could do to get the start-up funding that you need is to look at your personal finances, your ‘inventory,’ to find out if you would be able to fund your business yourself. This concept is highly unlikely, but some people have managed it. You should look at the money being brought in by a part-time job, a life insurance policy and family and friends as well as any money that you have at your disposal from a credit card.

By using personal finances, you in effect become your own boss, which gives you control over your money. If like many you can’t afford to use personal finances you have the option of borrowing money or getting the help of an investor. You may want to borrow finance to cover aspects such as day-to-day expenses. The main way that this is done is through a loan; however, as previously mentioned, many banks are reluctant to give a loan to a new business venture.

The best way in recent times for a business to gain the finance that is needed is through the use of equity funding. Equity funding is share capital, which is invested in your business in return for you handing over a share of your business. Whatever business funding you decide on you need to ensure that within your business plan you have stated how much funding you are hoping to gain as well as what you want this funding for.