How To Finance Your Business Idea | Business 2 Community

The thought of having a small business is something that many people dream. Being the new Bill Gates or creating an empire like Sir Richard Branson is what entrepreneurship is about. Entrepreneurship is now one of the most popular routes for having a career for graduates in the UK compared to traditional careers such as financial services and law. However, cash can get in the way of a start up dream if your business is undercapitalised. Make sure that your business idea is full of cash that will help you pay for expenses and run the company for it to generate turnover and profit.Take a look at the top tips on how to finance your start up to ensure that it grows into a successful business:

• Look at alternative finance: One of the biggest trends in financial services has been the rise of alternative financial services companies such as consumer finance and commercial finance lenders. High street banks have not been able to respond to the growing need for commercial finance which has led to more lenders offering start ups various loan products such as online loans. There are plenty of differences that you should be aware of with alternative finance routes such as commercial loans. These can include complicated structures to loans (this is typically seen in bridging loans) and the interest rates can be high compared to high street banking. However, the range of alternative finance which also includes logbook loans means that if your start up needs cash, you can breathe easy by knowing that you have alternative options besides the bank.
• Use your own cash: While unsecured loans online are an option to fund your small business, you can also use your own money. The advantage of using your own money is that you don?t owe anyone any money and you are completely invested in the company. Entrepreneurs who are in low capital intensive industries such as consulting are able to use their own money to fund their businesses because they don?t need a lot of money to make these businesses work. Business ideas where you can self-fund also include e-commerce such as having an eBay shop.
• Looking for an individual investor: Business ideas that need significant sums of cash might need an investor. There are several types of investors. Small sums of money can be found from angel investors who tend to be successful entrepreneurs who want to invest in new ideas that will provide a return on investment. Larger sums of cash for business ideas that want to be empires need venture capitalists. These are investors who can provide $1m or more in a cash investment. If you are looking for investors, you need to have a rock-solid business plan that investors will love. These business plans for investment should include sales forecasts and profit predictions of how well you think you company will do.

Be the success that you want to be by choosing the right financial avenue for financing your start up.

Source: http://www.business2community.com/startups/how-to-finance-your-business-idea-0245735

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