Starting a small business can be a challenging yet exciting time, but one of the main concerns of starting any company is funding.
How do you fund a small business and where do you start?
Our guide on funding a small business is here to help…
Of course, one of the best ways of funding a small business is out of your own pocket – this means that you’ll be left with no debts to anyone or any company, which, for many, can seem like a dream.
This option can be quicker and easier than relying on others or waiting and applying for financing options from a bank, so it can also get the ball rolling quicker.
If you have the means to do so, or have saved up a sufficient amount, then funding your business through personal investments is a brilliant start.
Bank loans are a highly popular method of funding a new small business, with a number of well-known banks offering business loans that help companies to grow and develop. It’s important to take into account any interest rates that may accumulate and the amount of time your loan can be paid back in, both factors which determine if this is the best option for you.
There are a number of other options when it comes to loans such as a start-up loan which could be beneficial for starting a small business.
Having an investor can massively change a small business, with many investors choosing small businesses over corporate ones due to the personable feel and the opportunity for development.
If you’re interested in funding your business through an investor, it may be worth researching local investors and getting in touch with their team.
Friends & Family
Some are lucky and grateful enough to have friends and family who would be able to fund a small business, whether that be just one person or multiple chipping in. One of the things to keep in mind is if the person investing in your business would like that money back, or if it’s a gift. It could be wise to create contracts and agreements, keeping the funding process as smooth as possible.
Those are our quick tips for funding a small business, whether it be your own personal investments or others – we wish you luck with your next business venture.
If you’d rather buy an established business to develop, view our Businesses for Sale.