If you have a great idea for a new business, it can be frustrating when you don’t have the funds in place to get started. Raising capital for a new business venture can be difficult but if you’re really determined to get your business off the ground, it’s definitely doable. Once you put your mind to it, there are some great ways to raise money to start your new business.
Personal loan
In actual fact, one of the easiest ways to raise money for a small business is to take out a personal loan. It depends what type of business you are looking to start up, but with a personal loan you can get up to around £25,000 to start your business. You’ll need to be in a good financial situation first, but you can easily obtain a personal loan from your current bank or search around for good deals.
If you’re worried about putting yourself in an unsecured position with a personal loan, or you’ve already got a bad credit score, services such as everyday loans can help you get that money you need to start your business.
Business loan
With a business loan, you can easily raise the capital for your next business venture. You can take out around the same amount as a personal loan but often you’ll get better rates. Whether you are able to obtain a business loan can depend on how long you’ve been trading, but if you are able to turnover decent money in your first year, you may be able to get quite a substantial amount. Similar to a personal loan, you may need a good credit rating to get a loan. Banks or lenders also like to see a business plan with expected profit and loss accounts as well as revenue predictions before they provide you with a loan.
Government assistant
In some cases, the government can provide funding for small business startups. It’s worth checking out whether your business is eligible for any type of funding or bursary to get started. The government also provide loans similar to an unsecured personal loan. The difference is, they also provide free support and guidance as well as a years’ worth of mentoring to get your business off the ground.
Crowdfunding
Crowdfunding has more recently become a popular option for raising money to start a business. If you are unable to get a loan to start your business from the bank or the government, then crowdfunding could be a good option for you. There are quite a few options out there online, so it’s recommended to put in some research to find a good company. It can also work well if you’re active in promoting your new business.
Work hard
One of the easiest, but also the hardest ways to make money is to raise the capital yourself. It’s very rare that a business owner didn’t provide some of the capital upfront when it began. If you really believe in your idea, then you can work hard now and save up so that you’re more likely to be able to contribute to your business.
Borrow from a family member
Although some business owners can avoid asking family members for money to start a business, it can be a better option. Parents can gift their children small amounts of money throughout their life and it is not eligible for tax payments. However, if they were to leave you with something in their estate after they pass away, you’ll be paying hefty tax sums. Therefore, it can actually make more sense for your family to give you the money now. Additionally, it’s smart to pitch to your family the proper business proposal to get them behind your idea. They may offer money if you’re really passionate about your new business.
Find an investor
There are plenty of companies out there who like to invest in new businesses. In additional to this, angel investors, also known as silent investors, can help get small businesses started. Some investors will ask you to follow their lead with the business, while others may offer and believe in your strategy for your business. Make yourself visible on the market and approach some investors. You never know, you may get some coming to you who are really keen to back you for the long term.
Get a business partner
If you can’t raise the capital yourself, it might be worth considering a business partner. Instead of owning the company or having investors own shares of your company, buddy up with a business friend you trust, and they can help you raise funds for your business.
Small business NGO’s
There are some non-governmental organisations (NGO’s) that actually provide funding for startup businesses. They have a wealth of knowledge when it comes to tracking down capital for small businesses. Whilst they may not be able to fund you directly, they can definitely point you in the right direction on where to make some money. They can provide assistance and you can utilise their skills to help find funds to start your business.
Start small
If you really can’t find the capital to start your business, but also don’t have the time or money to start investing in it yourself, you may want to consider starting on the side. Working full-time and starting your business on the side can be a great way to make extra money whilst getting started. You can opt to freelance for other companies or start your own website to get new customers. It may not be ideal to start slowly, but you do have the ability to make some decent money to get your business off the ground.
Whichever way you decide to raise capital for your new business, it doesn’t have to be difficult. The main thing is to remain passionate and determined and to not give up. It’s essentially a numbers game; the more people and ways you reach out to raise money, the more you are able to get.
