During the start of the pandemic, many displaced workers often found themselves looking for other sources of income. Some were lucky enough to have been contacted once again by the office. The others? Not so much. Some didn’t dwell on that fact, though, and started their own businesses.
If you’re one of those with a still-struggling startup, chances are you’ve already started to look for sources to start your own business. From considering using your property mortgage money to start or grow your business to looking for other sources of money, you might’ve scoured places to see if you’re lucky enough to have more funding to grow your small enterprise.
There are different sources depending on how big your business is. You can consider taking on some debt but nothing too large, or you can also choose to go the path of using equity. Here are a few sources of funding you can consider.
Business loans are still up there as one of the best sources of funding, provided you can use them properly. If you’re already generating some revenue, this is one of the best ways you can continue to generate more funding for your business.
You should remember that any loan you take on is considered debt, and all debts should be repaid. You should review the terms and conditions of any loan that you get into. This is to avoid any sticky situations that should arise if you eventually fall back on repaying that loan.
Carefully consider any of these debts and find other affordable forms of loan and finances before you agree to any loans or take on any debt. Use a reliable mortgage calculator if you are planning to take out a property loan and use the property for business. This will give you a clear picture of how much you will spend.
Start-up loans are just a little more complicated than business loans. Whereas you’re speaking to a financial institution like a bank or a lending company when you get business loans, with start-up loans you’re speaking to the government or a similar institution.
There is a certain amount available for those who take this loan. It depends on case to case whether you’ll get a higher amount or a lower loan. The terms are also very easy to pay when compared to the usual lenders you can get loans from.
There are a lot of businesses and business owners that don’t read into this aspect. If you’ve got the paperwork, take time to read it, since there are other rules there that will be a big help toward repaying your loan.
For small businesses, a grant can be offered by the government as well as other private institutions. These grants are made available by the offering institution for small companies that are involved in a particular area; these are usually companies that are ‘developing’ technology in a field of interest in the government or are helping disadvantaged people.
If you want to get this specific grant, you’ll have to be involved in either of the two. The application process may also be a little long, so you’ll have to be proactive in finishing the requirements to get the grant as soon as you can.
These are the most common form of loans used by companies. All banks offer this, and there are a lot of other institutions that also give this option upfront.
It’s a good idea to go around finding banks that offer the best options. You should also know that bankers are always on the lookout for your records. If you’ve got bad credit or a low-performance score, it could be hard for you to secure a good deal on your loan.
Even if you’ve got a solid idea for a start-up, your chances may not be as good as you think it is. You need to have a great business plan as you’ll have to repay the loan within a set period. You’ll also have to offer a great guarantee to pay off your debt.
Money from Friends, Parents, and Close Acquaintances
The simplest loan you can get is one that’ll come from people who believe in your vision the most—your friends, colleagues, and even your loved ones. This is what’s known as “patient capital,” or money that will be repaid with your most immediate business profits.
The catch here is that you have to repay it as soon as you can or within the options offered by the people offering the loan. Your friends and family rarely have the cash to spare, and they’ll also want more than just the money back as a guarantee.
There are a lot of ways to secure the money needed to start your business, but you have to make sure you have the best idea out there. Make sure that you’re going to repay it within the terms set by the loaning party to avoid any troubles.