Are you looking funding for business but not sure how to get your business funded? Money is the bloodline of any business.That’s why, at almost every stage of the business, entrepreneurs find themselves asking – How do I finance my startup?
After coming up with your business idea and putting the groundwork in place to start it, the next stage you need to consider is how you will fund it.
Some businesses, such as eBay or online ventures, will require very little money to start; others, such as retail, will need a substantial injection of capital for stock.
Your options for raising finance are no longer limited to re-mortgaging your house or approaching your bank manager who will 99% say no! Here are 5 ways to Finance Your Business.
1. Business loan
Despite a fall in lending, the traditional business loan route is still a popular option for start-ups, and you have the advantage of retaining equity in your business.
The government is pushing hard to increase the availability of these loans for small business, through initiatives such as Funding for Lending, Start-Up Loans and the Business Bank. Make sure you know the ins and outs of these as they could represent a vital lifeline for your start-up in the first 12 months.
2. Small Business Grants
Not surprisingly, start-up business grants are highly sought-after, and hence difficult to come by. If you can obtain one, however, the benefits are obvious and numerous – start by reading our guide to the different types of grants available, and learn about the different institutions that provide them.
3. Invoice Finance – Factoring
Invoice finance, or factoring, is a popular option for businesses with unpaid invoices to access working capital quickly. If you’re unfamiliar with this funding method, learn what it is and how much you can raise with invoice factoring.
As the majority of providers will make you commit to a deal for 12 months or more, where some work on a monthly basis. Making sure you know how to choose the right one, the best way for this is to use a broker like invoice-funding.co.uk with its knowledge of the industry and products that are right for your business.
Crowdfunding sites allow members of the public to pool their resources, investing as little as £10 each in start-ups. If you’re unfamiliar with this increasingly popular method, the only issue is new start ups may not get the funding they require in the first six months.
5. PDQ / Merchant Cash Advance
A Merchant cash advance is a funding solution for small business and SME’s, praised by the government as an alternative funding option for UK businesses it has already helped thousands of people . It’s designed to work alongside your busy and quiet periods for example if you have a slow month on your card sales then you only pay back the agreed percentage of those sales – keeping your repayments in line with your cashflow through the good times and bad. The unsecured business loan alternative is repaid only when you make sales on your card terminal (PDQ) machine. There are absolutely no hidden costs or fees.