All businesses need money to grow regardless of their size- big or small. To propel your business, you will need big investment, on the other hand, if it’s small then small funding will suffice your need. Overall, it can be said that a business cannot run without a capital infusion from time to time.
While getting financing for big businesses is quite easy these days, small businesses struggle to obtain funding for their operations. Small business owners understand that they need to put some money into their business before they start making a profit. In other words, they need a source of funding. It can be for anything such as developing a new product, expanding your business, making payments to your suppliers, etc. There are various options for raising funds for your small business.
One’s Own Investment
The first source of investment in your business is your own savings. If you have some then you can use that money for your business needs. In another case, if you are blessed with some good friends and have a supportive family, then you can ask them to give you a hand and invest in your business.
This type of investment can be good for you in the early phase of your business. But you have to proceed with some caution while taking this funding route. It is important to have the proper paperwork to avoid any conflict in the future.
It is one of the oldest and traditional ways of getting finance for your business. Taking loans from a bank or financial institution can really help you to meet your needs. It is also a fact that getting loans from a bank is not an easy task and you have to do some hard work and keep patience. Banks or any other lending institutions don’t provide loans without proper diligence.
In order to secure a loan, you have to be ready with the following:
- A lucid and brief business plan
- How you are going to use the loan amount
- A detailed repayment plan
This way you can successfully obtain a loan from a bank or other financial institution provided that you fulfill all the eligibility criteria set by them.
In case, you fail to obtain a loan from a traditional lender, you don’t have to worry about the future of your business. Apart from traditional lenders, there are other various means of getting loans such as private lenders, online lenders or direct lenders, etc. The UK’s lending market is full of these types of lenders and you can get loans from them easily. There are many types of loan products offered by them such as short term loans, long term loans, Loans for unemployed with bad credit no guarantor, etc.
Help From Government
The UK government has many schemes which provide financial aid for people who are looking to start a new business or planning to propel their business. You can get loans of up to £25,000 at a fixed rate of interest which is six percent annually. Apart from providing you loans, they also help you with business planning and how to expand your business. These loans are provided as an unsecured loan which means you do not have to provide any security or collateral.
The other option available is Innovate UK which helps businesses with funding to develop new products, processes, and services. You can go through it and check if you are eligible to get help from them.
It is one of the latest buzz words in the business industry. Many companies and businesses are taking this route to gather money for Propel their business.
In this type of funding methodology, you can ask the public to invest in your business. It works by taking a small amount of money from a large section of people. But you have to provide them something in return- either shareholding in your business or share of profits.
Most of the time, businesses choose to share in profits because it is very difficult to manage a large number of shareholders in a single business entity which is very small currently.
After going through all the available options for funding, now it must have been clear for you to decide. Hence, it will be better to assess your cash need properly and choose the option which suits you the best. You should stay away from taking unnecessary loans or money for propel your business because if you fail to repay on time, then it can have serious repercussions on your credit history as well as on propel your business.