Here are a few ideas on raising start-up cash for you to consider.
Savings & Personal Investment
Many people use their personal savings or maybe some redundancy money to start a new business. You might consider raising money by selling assets, such as shares or valuables, or possibly by re-mortgaging your property.
You might also want to consider approaching friends or family to help you get your new business off the ground, but be wary.
Borrowing start-up funds from friends and family can be a great way to get your business going but they should only invest money they can afford to lose. If the business should fail then relationships could become very fraught.
Bank loans for business start-ups are hard to come by these days. But that’s not to say that there are no funds available from banks, it’s just that their criteria for lending these days is higher and you will need a solid business plan before a bank will consider lending you some money. You may also need assets that you can offer the bank as security against any loans, however if you haven’t any suitable collateral then you can ask your bank about the Enterprise Finance Guarantee (EFG) scheme, which the government introduced to help small business secure finance
Crowd funding is a great new way to raise money for a new venture. Crowd funding does exactly what it says, it brings together a crowd to raise funds!
Simply put, it could be that say 10 people put in £500 each to provide a £5,000 funding, or 5,000 people each giving £1 will provide the same level of funds but spread over a larger investor bank.
There are many grants available for small businesses but they are quite hard to come by and can be just as hard to obtain.
In the UK alone there are hundreds of grants available but before you apply for any grant make sure you have a solid business plan, and that you are prepared to put in some cash of your own.
Often grants are only available for very specific business projects such as training, development, energy and the environment and innovation. If your business qualifies for a grant, it can be a really effective way of getting your business started and helping it to grow.
Dragon’s Den has been a very popular TV show with some pretty intimidating individuals putting up potential cash if they like you or your business. A business angel can be anyone, a professional investor, an acquaintance or friend, a former employer or maybe someone you’ve found through networking.
We hope you find this article useful and, if you have any questions about funding your own new business idea, please call us here at Green & Peter.