Pursuing a new business idea or venture is an exciting time. However, once the business plan is developed, it’s time to think about funding.
These days there are a multitude of different sources of finances to take advantage of, but it’s important to ensure you opt for the right one for you.
To help, prepaid MasterCard providers, icount, have generously offered up their tips on how you can secure funds for your business idea.
If you’re keen to get your business plan off the ground and don’t know how to find the money to get started, read on to discover a few ways you can get a bit of extra cash to get going!
Family and Friends
Whilst this is one of the more obvious sources of finance, it is an option that is not often considered by many business people.
Borrowing from family and friends is a great way to get your business started. You don’t risk any of your assets by borrowing and you may also be able to save on interest costs.
However, it’s also important to remain open and honest about your financial situation when borrowing money from family or friends.
This ensures any problems are resolved early on and lessens the risk of damaging the relationship between you and the lender.
Government Start-Up Loans
If you’re starting a new business, then you may be eligible for funding from the government. This government scheme allows eligible applicants to borrow up to £25,000, to be repaid between 1 and 5 years after borrowing.
Loan recipients are also entitled to 12-months of free business mentoring, and the interest rate remains fixed for the duration of the repayment period, making this a great way to get your business going.
You can visit the Start Up Loans website to learn more about the scheme and to see if you’re eligible.
Raise the Funds Yourself
Raising the money yourself is one of the reliable ways to fund your business venture. You don’t have to worry about credit checks or failed loan applications; and your assets aren’t at risk should you find yourself in financial difficulty.
Although it may take a while to raise the money, this is usually a more rewarding way to get off the ground.
Crowdfunding involves raising money for a project or charity through donations from the public.
People can donate money to many different causes, however many use crowdfunding platforms to raise money to cover product development costs.
With Crowdfunding, there’s no limit to how much money you can raise. And it’s also a fantastic way to raise awareness and create extra demand for your product or service.
These days, almost all major banks offer business loans for those looking for business funding. Interest rates and repayment time periods vary between banks, so it’s worth shopping around to see which bank loan suits your requirements.
With business loans, you will also be subject to credit checks. So it’s important to make sure you have a good credit rating to increase the chances of your application being accepted.