Raising funds is one of the most important aspects to be considered when setting up a business. With strict lending norms and high rate of interests, entrepreneurs need to be smarter when raising funds for their businesses.
Also, one should not rely on traditional lending sources entirely. According to Phil McCabe from Forum of Private Business (FPB), with increasing restrictions, it is becoming harder for business people to raise finances. What needs to be done? You must think of smarter ways when seeking loans and other financing opportunities. You need to learn the tricks and tips to gather funds effectively.
Here are few ways to raise funds for your business: Crowd funding although crowd funding is a recent concept, it is gaining popularity as a source of fund raising for start-up businesses. Crowd funding has got its name for the reason that the project is funded by personal funds of the public.
Beginning with, your business idea is proposed to the public, depending on which people shall choose the amount they wish to invest in your project. To raise capital, reward based models are used by many sites for crowd funding. In this model, people investing in new businesses are rewarded in some form or the other like providing the product the start-up is going to produce.
Angel Investing Many entrepreneurs who are successful in their businesses and have enough money to invest in other’s businesses are looking towards start-ups for investing their funds. The advantages of angel investing are not limited to raising finances only, but much more. Angel investors can offer valuable advices and important connections which can be quite beneficial for the business in the long run. Friends and family Family and friends can be great investors.
As they always want you to succeed, they may agree to provide you a substantial amount to finance your business. You may also offer them a stake in your business. However, such investments should be handled carefully so that you don’t lose their money. You should also make sure to return the amount as soon as possible. Bank loans the most common method to raise funds for your business is a bank loan.
However, the banker may ask you for a guarantee before approving your loan and you’ll have to pay an interest on the amount taken through loans She is a parent of two kids. Her interests are Films, Travel & Technology and Eco Living.
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