One of the biggest challenges when it comes to setting up a business is securing the right investment to get things off the ground. In fact every new business owner would rank finances as one of their major concerns and this can often put some people off the idea of launching their own business. There are however many routes by which a new business can secure investment, the key is finding which is the right one for the particular scale and type of business. These are the most common ways by which new businesses can secure the funding that they are looking for.
Venture Capital
Venture capital is an investment fund or individual which seeks to do deals with young businesses in exchange for a stake in the company. The benefits of having a VC on board for the business is that they can not only count on liquid investment, but also in the expertise and experience of which a VC can bring. For the investor this provides a wonderful opportunity to get a stake in a potentially growing business, for a low price which could yield real returns in the future.
Specific Lending
There are many independent finance companies which focus on certain aspects of business which it will lend money to support with. For example Sertant Capital is an equipment finance company and helps many of its clients to support large funding for the machinery and equipment which a business will need. Whether a construction company is seeking out new vehicles or a print works needs extra and more powerful printing presses, companies like this can help with smart financing options and favorable terms. These companies lend for specific purposes and many businesses can take advantage of that.
Bank Loan
A traditional bank loan is still a very commonly used option for new businesses and a large percentage of a bank’s financial portfolio is made up from its business investments. Banks will dedicate a business manager to help support their clients during the loan spell, offering a business both financial and industry support. After all it makes sense that a bank wants the business to do well, as this way they get their money bank and secure future investment.
DIY
We are started to see many young businesses looking to bootstrap their own fundraising through the use of multiple streams of financial support. Often this comes from personal savings, friend or family loans, credit card use and in recent years we’ve see a spike in the popularity of crowdfunding. Crowdfunding is basically about seeking contributions from the worldwide community to support the business in getting off the ground. In return for a donation there is shall a gift or a product for the person giving money, rather than offering a share in the business. Bootstrapping is a risk averse strategy which is perfect for any small business.
There is a wide range of options out there for any business looking to launch.
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