One reason why so many people with great business ideas give up is due to the lack of financial support for their projects, there is no business success without funds, we need funds to make any business project a huge success, and the absence of finance, can make it difficult for us to achieve, this post is aimed at pointing out some of the available financial source options for new businesses.
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The first means of getting money to run a personal business is through personal investment, you may not have a lot, but you should have something either in form of cash or in form of collateral, with collateral, lenders will be more eager to loan you the money you need to run your business.
The second source of capital for a new business is what bankers refer to as patient capital and what is generally called, love money, which is the money given by a spouse, parents, friends, or other close relatives, these family members loan money to the anticipating business owner until when the business begins to bring in profit and they can pay back.
The third type of capital raising option for new businesses is venture capital, in this case, it is important to bear in mind that, the source of funding is not readily available for all types of entrepreneurs. Venture capitalists are usually always focused on technology-driven companies and businesses with a potential for high growth in sectors like communication, biotechnology, and technology. Venture capitalists will require that you give up some ownership of the business and they expect a healthy surviving business in return, ensure to look for investors who have good experience and knowledge readily available to be added to the business.
You can also get your business funded through angels, angels are wealthy individuals or company executives that are retired and then choose to make investments in little firms owned by others. They fund interesting businesses with a large sum of money and in return reserve the right to supervise the practices of the company's management.
Raising business capital is also very possible through crowdfunding, which is a form of fundraising where you ask the crowd for contributions often in exchange for equity in the company. It is usually a private company demanding little contribution from a large crowd of individuals. There are different forms of crowdfunding, we have; Equity crowdfunding, debt crowdfunding, and donation or reward-based crowdfunding.
There are other options for raising funds for new business owners but I will be stopping here today, would probably share more some other time. I hope you enjoyed reading it.