You can have a business idea and still be looking for how to finance your business. Getting funds to kick-start your business could be as challenging as having an idea and making your business plans altogether. Many great business ideas today are still latent in great minds, who are less privileged because of the challenges of generating funds for business.
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Do you have a business plan but no money? Don't worry, you will get to know how to raise funds to back up your business plans and make them a reality. You will break out of your shell as you know and access great opportunities available to your business. You must leave your mind open to think big and be willing to take reasonable risks and succeed.
Possible Ways to Finance Your Business
1. Bootstrapping
This is one of the ways to start up a
company or small business with little capital. It entails you have to depend
only on personal finance and not borrow from others. This form of financing
allows you to maintain full control over your business, although it can
increase financial strain.
Many successful businesses today, were built on bootstrapping without any external funds. It is better to use this means of funding when your business is still in a start-up state but if you want to boost your business, this may not be the best means rather consider other sources you will see in this content.
2. Partnership
You can partner with a person who can fund your business. You have the idea, he has the. Cash. This means that you do not have full control of the business rather you both will have to manage and operate the business, share profit, and most times even in decision-making.
3. Business Loans
Borrowing from an external body is another way to finance your business. There are many financial bodies you can access loans from
3.1. Family and Friends
Most times this is one of the easiest and most flexible means to help finance your business. These are the closest people in your life who will be willing to support your dreams. Supposed you have gained their trust over the years it becomes quite easier to access funds from them.
The good thing about this kind of fund is that most times, you wouldn't have to pay any interest rate, and repaying such a loan is usually flexible.
3.2. Development Bank
You can visit development banks for loans, unlike other banks, they don't charge high-interest rates. The Bank of Agriculture and Bank of Industry are examples of development banks, they have programs mapped out specifically to finance small and medium-scale businesses.
One other advantage they have over other major banks is that you can have access to loans without collateral. Other banks that give you such fair treatment without collateral and allow you to repay over a given time are micro-finance banks.
3.3. Commercial Bank
Commercial banks give loans both to small-scale businesses and big companies only that they have more rigid requirements, unlike development banks. They will require you to provide collateral. Nevertheless, you can access it if you have their requirements.
4. CrowdFunding
Crowdfunding is another means to raise funds for your new business. It is the use of small amounts of capital from a large number of individuals to finance a new business venture. it involves a network of your circle of friends for easy access on social media platforms.
There are also crowdfunding websites that bring investors and entrepreneurs together with the purpose of increasing entrepreneurship by expanding the room for those who want to invest.
5. Angel Investors
Angel investor is mostly a basic source of raising funds for many businesses who find it more convenient than others, it is a more predatory form of funding. An angel investor is usually a very rich person who funds small businesses at the start-up stage with their own money, they are usually found among your circle of friends and family.
Most times they will want to have equal ownership in your business. The funding is usually once during the start-up stage or when the business is facing lots of risks.
6. Government Grants
There are grant offers from government bodies and international Organisations, these are meant to support both small and medium scales businesses in Africa. One of the major purposes of proving these grants is to gear up development, encourage local technology, and reduce unemployment.
They create rooms for small businesses to help them stand and employ labor so as to reduce unemployment in the community. You can search for a government grant and apply for funding.
7. Personal Assets
Assets like lands, machines, and buildings can be sold and the cash used to finance your business. If these assets are not currently in use, they could be a good way to help you raise cash to start up your business. Instead of setting them as collateral for loans with interest rates why not sell them and invest the money into your business.
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