Despite what the last 10 months may have made you think, and despite the fact that so many businesses have been forced to close their doors, the coming year is in fact a brilliant time to launch an new business. This is down to the fact that there are going to be gaps left from businesses who have closed, there will be plenty of drive to get people buying once again and there will be a benefit of setting up a business under the current conditions, helping to give an advantage to so many. Setting up a business doesn’t need as much funding as many think, and here are some tips on securing the cash to get set up.
There are some brilliant lenders out there like Sertant Capital which will look to loan you money specifically for buying the equipment that you need to get things started. For example if you are opening a restaurant then this funding can be used for investing in the kitchen. This type of lending greatly helps you to secure further loans from banks down the line, because there is an understanding that the money is you’ve borrowed is for equipment only.
Friends and Family
The best option here is to get money from friends and family if this is possible. Bootstrapping your business like this means that you are going to be able to pay the cash off quicker because there will be zero or less interest to pay. Be sure that if you are going to go down this route to borrow money that you are doing so from very trustworthy friends and family, because money between even the closest of relationships has the power to break it up.
If your business has created a product which you think could perform very well then you could certainly look to get a venture capitalist in to support you with this. A VC will look to invest in you for a share of the business, and then they will use their experience and their support to drive your business on and to reach higher levels of success. Although this will see you losing quite a chunk of your company, the remainder which you are left with is likely to be much more valuable because of the introduction of a VC.
And finally there is always the chance for you to go down the well trodden route of getting a business loan from the bank. In order to do this you will have to make sure that you know your facts and your figures and that you have a good enough credit rating so that you can be approved for a loan. This will be helpful as it will offer low interest rates and favorable terms which seek to help the business get over its first couple of years before it needs to repay the larger part of the loan.
You may be surprised at just how little you really need in order to set up your own business.