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How to Get Funded For Your Business

Securing funding is a vital part of organizing your business. Through funding, you make it possible to start the actual operation of your business. This is where you get money for buying equipment, leasing office and securing your assets.

What are the possible funds available and what options are available to you?

When you talk business, it all boils down to capital. Capital is the most important asset that a business should have. Capital is used for buying or financing the starting requirements of your business, like securing your intellectual property, leasing your office property and purchasing your equipment.

Question is, how can one secure capital? It is surprisingly a difficult process, as contributing capital is a considerable investment and not all people you approach are good Samaritans that will give their money to a fledgling business that seems to teeter on the brink of uncertainty.

There are many types of funding available for your disposal, and these are:

  • Bootstrap capital
    Bootstrap capital uses personal funds. This is a very risky approach, as you could lose a lot of money if the business does not fare well. However, it does guarantee you full flexibility and freedom in running the business but you also have the responsibility fully to yourself. Bootstrapping also makes it slow for the business to recognize profits.
  • Acquaintances
    Individuals can always seek financing from friends and family, however, this may be difficult and can only come once. You also have a personal responsibility if the business does not succeed.
  • Debt funding
    This involves securing loans from banks and other financial institutions in order to raise capital. This is quite a long process as you, just like other individuals, have to pass through a check to ascertain your eligibility for a loan. However, debt funding makes it possible for you to acquire capital without having to use your own money. The only disadvantage is that you have to constantly pay interest or else you incur a default with corresponding penalties. It is also risky as some banks may require collateral.
  • Grants
    These are funding provided for some financial institutions for businesses of a specific niche. Businesses don’t have to pay interest in this type of financing. However, applying for a grant is a difficult and competitive process. A grant may also limit your operations to a certain extent.
  • Angel funds
    Angel funds are given for free in exchange for equity and some guidance from the investors. You are basically delegating a part of your ownership in exchange for mentorship but you gain experience in return.
  • Venture capital
    Venture capital is quite difficult to secure when you are starting a new business because venture capitalists would want a good track record. In the event that they do invest in you, you must show them a good promise of growth and profits which you can do by polishing a good business plan.
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4 Comments

  • Patreciah Kgoete said on July 4, 2012
    I am currently looking forward to stat a gas station business,but am not working and am not sure how am going to be funded to start this business. I am still young at the age of 23 and studied public relations. Please help me to succeed in any business that am looking forward to start. regards
  • Shaju Vijayan said on August 18, 2012
    I am going to start a business in my own brand name of Jeans & casuals at Kerala-INDIA. I am in need of financial help. If any government institutions or private sectors are interested to fund me please call or email me : shajuvijayan1977@gmail.com, 09961921166, 09037363504.
  • Alao Afolabi said on February 21, 2013
    My business is located in shomolu, Lagos, Nigeria. I run a printing press and I need your guide on how to write a standard business proposal and the necessary steps I need to take in achieving great outcome
  • Frank Osei Antwi said on October 9, 2013
    I am looking forward to operate a truck business but my only problem is to get funds to start this business, i have dreamt of for fourteen years now. is not easy to buy one truck and a trailer. Please i will be very happy if you can help me get an investor or a company who can help me with a used truck and trailer I would be very grateful. I have experience in management as I did commercial management. Am from Ghana in the city of kumasi the second capital of Ghana. This are my contacts +233265112998 /+233243489263.

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