Start-up businesses are a viable way of stimulating economic growth. This is why governments often provide various incentives to stimulate growth in the sector.
One of the main challenges faced by business owners is a lack of funding. For business owners who are serious and dedicated towards getting their start-ups off the ground, options may include business start-up loans and funding.
Funding the enterprise with your own money can be a viable option if you can afford it , while borrowing funds from family and friends may also be an option.
If you want approval for business start-up loans and funding, it’s important for you to be able to present a professional business plan, with all necessary figures and statistics that show how the business can provide long-term success.
Some funders may require Return On Investment, while others may require an equity stake in the business. This is why it is crucial for you to be clear about which type of private investor you want to work with.
Types of business start-up loans and funding:
Bank Finance – this is usually for businesses that have been successfully running for a year or more, with a proven track record.
Angel investors – in return for funding, you need to share partial control of the company or a stake of equity in your business.
Overdraft – this is a credit facility that allows you to borrow until you reach your limit. This is why it’s important to separate your personal account and business account.
Private Equity – money from third-party investors is pooled together and invested into other businesses.
Debt Finance – can be short/long term and is usually used to kick-start operations.
Asset Finance – enables you to buy movable assets and equipment.
Venture Capital, Government Funds and Government Grants are further options for business start-up loans and funding.