With today’s generation starting their own businesses more than ever before, it’s clear that the entrepreneurial world is booming. However, with the average cost of starting a small business being between $5000 and $10,000, having access to this large chunk of money can seem almost impossible for budding entrepreneurs.
But getting a business loan is much easier than you think. As long as you do the right research, finding funding to grow and nurture your new business will become achievable – read on to discover the essential sources you need to know about, to identify which is right for you.
As the name would suggest, this is a loan provided by a bank that must be paid back. Generally, bank loans are paid back in fixed amounts, with interest, each month for a specified amount of time.
The repayment schedule that comes with bank loans provides the stability needed for you to plan ahead with your finances, which is a great benefit for new business owners with little experience.
However, banks are often hesitant to give loans to those with no previous record in business, and interest rates can be extremely high if this is the case. But this still remains one of the most popular funding options, with many more factors applying to a loan for businesses from banks.
A great option for both networking and an experience perspective, getting an investor on-board to fund your business is an attractive choice for many new entrepreneurs. Typically, investors will invest anything from $10,000 to $750,000 and, as they’re personally invested in the success of your business, it’s highly likely they’ll be on-hand for advice to grow your business as quickly as possible.
However, one of the main disadvantages of this method is having to give up a share of your business. Investors will obviously want something in return for providing funds and the more they invest, the greater the share they’ll likely expect to receive. But especially for those with no previous track-record in business, this can still be a worthwhile offer worth taking.
A perfect option as long as you’ve got a solid business plan ahead of you, grants are entirely different from business loans in the sense that you don’t have to pay them back. However, this also means it’s often extremely difficult to become eligible for a grant let alone finding a funding body to cover all your start-up costings.
But, if you do your research and investigate all your local grant options, you may be in luck dependent on your background and nature of your business idea. If you have previous experience, this will certainly stand well in your stead and increase your chances of getting a higher amount granted.
Starting your own business can be fun and exciting, and it would be a real shame if funding was the only thing standing in your way of getting your ideas off the ground. However, there are plenty of options out there that all have their own advantages – you just need to find the right method for you!
This post was written by Kieran Heath. Kieran started his business several years ago, starting from his kitchen table! Now in proper business premises and having grown from strength to strength, he shares some of his tips and knowledge online.