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Finding Start-up Business Capital

By: Rachel Newcombe - Updated: 16 Oct 2012 | comments*Discuss
 
Finding Start-up Business Capital

All businesses need some form of capital and funding in order to be able to start-up. If you haven’t got enough money to invest yourself, then which sources could you be looking towards?

Looking For Investors

You may want to explore the idea of whether you can find any investors to invest in your business. They could be a pure investor, providing money and perhaps shares in the company, or they may prefer to be a silent partner, where the money is provided, but they’re happy to sit back and let you make the decisions and run the business in your own way.

If you have a viable offer of investment, then do give it plenty of thought and ensure you know and are happy with what level – if any – of involvement in the day-to-day running of the business that they investor wishes to play.

pIf you’re taking investments from friends or family, as many people do, then do take extra care to ensure that you’re all fully happy with the deal and what’s involved, as mixing business with friendship or family can sometimes pose problems.

Finding Grants and Funding

It’s worth investigating to see whether there are any grants or funding opportunities available in your area that would be suitable for your business. Where grants exist, they often have set criteria that you have to meet before you can even apply, so you do need to do careful research first. Often grants are available for young entrepreneurs, businesses that want to develop new angles, or specific types of businesses.

Local business groups are a good starting point for finding out what types of grants and funding may be available in your area. Another good way of obtaining information is to look for the grants and funding directories available at libraries. Updated on an annual basis, they’ll provide all the details you need to see if you could be eligible to apply and, if so, how and when to do so.

Seeking Venture Capital Funding

Funding is often available from venture capitalists, although there’s a tendency to sometimes favour existing businesses that are expanding, rather than new businesses that are just starting up. There are official organisations in the UK that maintain up-to-date information about the venture capital opportunities available and how you can apply for it. A good starting point, for example, would be the British Venture Capital Association.

Applying For a Bank Loan

Getting a loan from your bank is one of the options available for business start-up capital. If you’ve been a loyal customer and have a good, clean credit rating, then the chances of being successful when applying for a bank loan will be increased. You’re very likely to need to present your business plan, ideas and reasons for wanting to apply for the loan, so make sure your presentation is up to scratch and you’re confident about what you’re asking for.

Applying For an Overdraft

If you only need money on a short-term basis to help you over the hurdles of starting up, then there’s also the possibility of having, or extending, an overdraft. This is not a good long-term solution, but can offer some flexibility and peace of mind on a temporary basis – especially if you’re sure you’ll be able to pay it all back quickly.

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