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Government grants and loans.
The Small Business Administration and a number of state and local government agencies exist solely to help small businesses grow. Many offer loans and grants to help you get started.
Government funding is linked with efforts such as black economic empowerment, job creation and developing the economy. The business grants don’t need to be repaid or accrue interest and have strict guidelines for application. Some of these government grants include: National Youth Development Agency (NYDA) and National Empowerment Fund (NEF).
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Bank loans.
You can always open a line of credit with the bank if your credit is in good standing. A clean credit record is so important to small business funders. Importantly all partners involved in the business, and the business itself, must have a clear credit record or the application will be rejected. Banks will also charge interest on their loans which, if not kept in check can overwhelm and cripple a business.
The Nedbank Business start-up loan is a special offer from Nedbank tailored to address small business needs. And it’s available to new traditional and franchise businesses that have been in operation for less than two years.
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Self-fund your small business
If you’re a small business owner you can find investment or a loan from a family member, partner or friend or always use your personal savings. Just decide how much of your start up is worth the risk of losing. If you’ve only put in what you can afford to lose, you maintain flexibility in the business and minimise stress in managing it.
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Use tax saving tips for small businesses
Starting your own business isn’t just about the start-up capital but also about once you’ve the funds how can you save or manage costs by improving efficiencies. One way that SMEs can cut costs is through tax competence as a form of grant for their business. This assists in increasing your available capital from outside sources.
Do this by constantly tracking business expenses. Small businesses should keep record of all expenses regardless of their value. SARS provides deductions for a range of business expenses such as entertainment, travelling, gifts for clients and common office expenses, amongst others.
Also capitalise from running a small business from home. SMEs that use their homes as business premises can benefit from tax deductions such as interest payment on the bond and daily expenses incurred from running the business.