What to do if you need money for business
If the preparatory work is completed, the market is analyzed, the necessary idea is found, a business plan is drawn up, it remains only to find the money to start. Of course, it’s a little disappointing if you did not inherit millions, and earn thousands of dollars also did not work, but you should not despair. You can always find the right amount and “jerk” forward. There are a lot of opportunities for receiving money, you just need to choose the right option.
What to do if you need money for business
Venture capital fund and investor
Unfortunately, not for all domestic entrepreneurs, an attempt to obtain funds through a venture fund may turn out to be a success. This is because in our country such institutions of this kind are quite few, so it is very difficult to interest them.
To ensure that you receive money for a business, you will have to get “reinforced concrete” evidence of the profitability of the presented project. However, if a positive answer is received, then you will need a lot of patience. No one will give anything right away. First, an information memorandum will be prepared, then proposals will be developed for the investor, followed by diverse audits and, as a result, after a complete adjustment of the future transaction, the investment transaction will take place (first).
Do not neglect the help of investors. Some of them work independently, while others are part of an association. The main thing to remember is that you need to ask for an adequate amount, but remember that the more you ask, the sooner they will respond.
Bank credit is an easier way to get money. However, it must be borne in mind that it will be necessary to give back not only the borrowed amount, but also a decent percentage and time of payments specified.
In addition, banks need collateral. So money can be obtained under the property or under an existing business. Thus, the expression “money for business” will be considered in this case not “how to find money for business”, but “how to give money on time so that the business does not lose”.
Of course, if you are the owner of any real estate, it will be easier for you to receive funds. Or you have to leave your own business as collateral, which, on the other hand, will incredibly stimulate you. Loans in this case will not be targeted. In other words, no one will be interested in why you are taking the money and what you want to spend it on. But, if you cannot repay the debt and interest on time, the bank will simply simply take away your real estate or business.
You can borrow money for a business from a bank only by resorting to consumer lending. Such a loan is easier to execute and documents will need a minimum. However, there is a minus here too – the amount will be quite small, although it can be useful in the first stage.
If we talk about the need to obtain funds for the purchase of equipment, it is better to use leasing programs. This practice is used today quite often and works as follows: you need to find and select a supplier, after which, having provided all the data, the bank will pay for the purchase of the necessary equipment. Next, you will need to gradually pay the bank for the equipment purchased. In other words, installments will be provided.
However, not everything is as smooth as we would like. Initial investments will nevertheless be necessary in order to pay an advance, which can be up to 30% of the full amount. To deal with this issue in more detail, it is better to contact specialists – leasing agents.
Do it yourself money
In the event that you already have a certain project that brings sufficient profit, but which is not very “close” to you, you can use this fact and turn it into a plus. That is, it is quite possible to invest the profit obtained in a project that you like more. This method of investing is called diversification of capital. In most cases, its use is justified. In other words, funds for the right business were found on their own.
In addition, you can try to find money from relatives and friends. In this case, there are some positive aspects: the required amount can be borrowed without interest (or the percentage will be very small), you won’t have to wait for the application to be considered (either at the bank or when working with investors) and you don’t need to draw up an agreement (in extreme cases, you can get by with a receipt notarized). However, do not forget about the disadvantages of such loans.
Relatives and acquaintances may not always lend a large sum of money, yes, and if for some reason you cannot give everything on time, you risk losing not only business and money, but also friends. It is for this reason that it is better to still use some other options for searching for funds, and resort to this method only as a last resort.
You should not think about the fact that without big connections, influential friends, a high position or accumulated millions, money for business cannot be found. Today, in our country, there are a lot of options for getting the right amount.