How to Get Funding For Your business
How to Get Capital for your business
If there is one question i have heard over a million times it’s “How do i get funding for my business?”. These question normally comes in different forms such as; How do i get capital for my business? How do i raise money to start a business? How do i finance my business idea? etc. So i decided to write this article to share different ways to get funding for your business.
One of the greatest challenges every startup or entrepreneur faces, is the problem of financing a business, raising capital to start a business or growing an existing business.
It doesn’t matter whether you are in business or a startup, there comes a stage in your business where you will need to raise money or more money. So if you have an idea that you are planning to take to the next level. Here are ways to get funding for your business:
Ways to get Funding for your business
1. Personal Funds : The first thing that should come to your mind when looking for capital to start your business is, How much do you currently have to start the business, will the money be enough to kickstart, this will enable you determine how much more you will be needing .
2. Friends and Family: Most startups usually get their first funding through friends and families. These could be your best friend, your parent, your in-law, colleagues, close associates or siblings. The good things about this type of loan is it’s usually interest free.
3. Micro finance: One of the easiest forms of getting a loan or money to start a business as a small and medium enterprise (SME) is through micro-finance banks, you will hardly need to provide a collateral, you can get up to 5 million Naira depending on your business niche and strength. The interest rates for micro finance loans are pretty low compared to commercial banks. Micro finance banks don’t give long term loans.
4. Grants: When looking for capital to start a business, it will be very wise to try all available options which includes grants either from government or charitable organisations who gives grants to enterpreneurs and upcoming businesses. Grants are non-repayable funds which could be in form of money, products, machinery, goods or waiver to assist a businesses.
5. Get a partner: Another great way to fund your business is to get a partner. In this case you have an idea and your partner have the funds, then you could form a partnership based on an agreed equity between the two parties. Terms and conditions needs to be clearly laid down.
6. Venture capital: Before you contact a venture capitalist you really need to understand how they work. Most venture capitalist invest in early startups or existing business with great potentials with the aim of taking a huge share in the business. So if you are not comfortable with giving a large share of your business out to someone else. This might not be for you.
7. Angel Investors Fund: Angel investors are direct opposite of venture capitalist. Angel Investors provide funding to help your business grow and success rather than the benefit they will derive from your business.
8. Bank Loans: One of the most popular yet difficult sources of financing your business is the bank loans. Banks requires so many documentation and collateral before loans can be given. And unlike microfinance loans which could be access in a matter of days , bank loans often take longer and the interest rates can be killing.
9. Corporative: Any easy way to access almost an interest free capital to start your business is to join a corporative of like minded people that offers loan facilities to their members which could be in form of overdraft, soft loans, interest free loans etc
10. Credit: Another easy way to source for funding for your business if you are into product sales or manufacturing is to get credit facility from your distributor to enable your to do bulk purchase and pay at a later date.
11. Apply for business funding competitions: Another great way to fund your business is to apply for business funding competitions, business and entrepreneur reality show
12. Crowdfunding: Crowdfunding is the act or practice of seeking for funds for a project, business idea or venture through many donors or contributors via the internet. This allows you to solicit for funds from the general public to fund your business.