Financing a business with no money is not an easy task; however this challenge can be achieved with creativity and intelligence. The owners usually have to pay high interest rates for the funds that have been borrowed, along with an appreciable per cent of ownership in their business when they seek for financial support without any investment from their side. Have a look at the below mentioned ways through which this can be achieved:
There are many financial institutions that offer loans for business start-ups; you just need to provide the plan of your venture with the required documents and collateral. This process can be simple but the loan repayment period and the interest rates are relatively high. It is advised that you could secure a payday loan instead of a traditional loan, as it offers many benefits when compared to others; such as short loan repayment period, which needs no collateral, no credit check with instant approval and also improves your credit history.
These Angel investors (AI) have been funding many large scale businesses today; including Google, yahoo and so on. The AI are group of people or individuals who assure you with their own money investment in the start-up companies and also the existing ones with that are still in the early stages of growth. They are filling the financing gap in an accelerated mode that secures them a certain per cent of ownership in the business. Although they are motivated by their returns they usually expect 20 to 30 per cent Return on Investment (ROI).
Friends and family:
They are the first people that usually come to mind when you are in need of financial support. As friends and family are responsible for their continuous support that makes you incline towards them. This way of borrowing money will also give you a good support that your friends are with you in your start up business. The amount can also be negotiated and repaid as per your convenience. However when reputation comes into consideration this method should to be avoided.
It is a financial capital that is provided to early stage companies that possess high potential and high risk in their business growth. They make money by owning equity in the company they invest in, that is a typical seed funding procedure. They are suitable for the companies that have limited operating history and are too small to raise capital in the markets including the angel investing and other seed funding choices. They usually differ in their approaches depending on the requirement.
The government usually provides grants for the companies that possess good technology and those that are dynamic in their approach. These grants get sanctioned, resulting in the required money that is needed to start-up the venture without any financial hurdles; however the approval for the grant is a lengthy process that can be opted for the companies which don’t need fast setup.
Through this you can ask a few people to join in with you on your venture; they act as your business partners and also financial sponsors that provide you with the amount needed in setting up the business. They are eligible in getting more profit as per their investment.
My name is Alicia. I am a tech writer from Manchester UK. I am into Finance. Catch me @financeport