Accounting & Finance
Money On Your Mind? Financing Options For Startups
If you have grand plans to launch a new business, there’s a good chance that you’ve got money on your mind. Getting even a small business off the ground often requires significant investment. If you’re in the midst of doing the math, here are some financing options to consider.
Personal savings and loans
Many people choose to invest as much of their own money as possible when establishing a startup. If you’ve got savings put aside, it makes sense to use them before you start looking at sites like KingOfKash.com and shopping around for personal loans. The more money you can find to back the venture, the less you’ll owe others and the more you can take out of the business when it starts making money. If you’re not in a position to cover all of the costs, you could consider borrowing money from a bank or another lender. If you do take this path, make sure you compare offers and that you understand the terms of the agreement.
Business loans are not the same as personal loans. Many startup owners choose to take out a personal loan because they’re easier to obtain, but business loan rates may be preferential. If you are considering applying for a business loan, make sure your plans are watertight and be prepared to answer questions. You’ll need to have facts and figures to hand, and you should be able to rattle off numbers without hesitation. It’s really important to prepare for meetings properly, as you may not get a second chance to impress.
Borrowing from friends and family
If you’ve got a business idea and you’re confident that you can make it work, you may be thinking about getting friends and family involved. Borrowing from people you know can be advantageous because they’re likely to charge much lower rates of interest than banks. However, there is added pressure when people close to you are depending on you to make a profit, and it’s not uncommon for rifts to form when money is involved.
Seeking external investment
If you’re toying with the idea of getting investors on board, it’s essential to make sure you have an excellent business plan. Remember that it’s up to you to persuade the people in front of you to trust you and take a chance on you. Rehearse your pitch, be confident, and interact with the panel. Show off your personality, inject passion and enthusiasm and put forward the best possible case. If you need pitching tips, take a look at this article https://www.forbes.com/sites/ryanrobinson/2017/09/05/elevator-pitch-tips-making-impression/#3a1ce4657234. Be realistic with your valuation of the company and explain how you’re going to use the investment and what investors will gain in exchange for their cash.
If you’re preparing to launch a startup, you may be looking at possible financing options. It’s really important to do your homework, take your time, weigh up the pros and cons and consider the best route for you and your business.