How To Manage Funding For Your Business 


November 8, 2017 Facebook Twitter LinkedIn Google+ Latest News,Moneylender



How to manage funding for your business 

funding

KEYWORD PHRASES – funding your business 

Do you have a business idea or are you planning to expand your business? Whatever you intend to do, both scenarios demand finances. Securing funds for their business is a challenge that most entrepreneurs face. Plus, many startups fail in early stages due to lack of enough working capital to realise their vision and business plans. A strong financial plan and a thorough analysis of investment options are crucial to your business’s success.  

Although you may get some help from friends and family, additional capital and funding for growth plans. rRequire you to seek financial sources outside your immediate circle. There are several ways of funding your business to ensure you do not end up with shortage of working capital. Today, we give you some ways to finance your business and propel it to great heights.  

 

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Equity Fund Your Business 

One of the most common forms of financing a business idea or growth plan is equity funding. As a business owner, you can opt to share your ownership rights in the form of shares to secure funds. Investors are rewarded with dividends. This form of financing is highly beneficial for those who lack collaterals and the credit-worthiness to secure huge amount of loanHowever, the strategy goes deeper than just asking for funds in return for dividends 

Established and renowned businesses can easily attract financing through equity funding, but what about startups? Why would anyone give money to a company that has no track record or success guarantee? A powerful business plan with details like realistic financial projections, exit strategies, and a strong growth potential will be helpful in attracting investors. 

Go For Angel Investors 

Angel investors are affluent people who fund your business in exchange for a stake in your company. Not only this, most angel investors contribute their expertise and skills to help nurture startups. Angel investors are either individuals or a part of an angel networking group dedicated to investing in businesses with high growth potential. For instance, BANSEA, an angel investment network, puts their money in companies with high growth potential and promising returns. While some angel investors take an active part in your business, others prefer to be silent partners. Depending on your choice select an angel investor to help kick-start your business plan. 

Obtain Funds From Banks and Financial Institutions 

Securing funds from banks and financial institutions has been one of the oldest forms of financing business ideas and expansion plans. However, this can be the most difficult form of securing funds as banks are highly reluctant to take chance with their money. Since obtaining loans from these institutions require a high credit score, growth potential, and profitability. Tt is easier for established and known businesses to secure funding. But, that doesn’t mean small businesses cannot avail funds from banks and financial institutions. In Singapore, startups and early-stage business can benefit from microloan programmes offered by the government under Spring Singapore and IE Singapore.  

Take Advantage of Government Grants 

There’s no doubt that Singapore is an attractive option for those seeking to expand to the APAC region or kick-start a business idea. Thanks to the huge government support that boosts entrepreneurial activity in the region. Singapore government has come up with various schemes to facilitate startups and aspiring entrepreneurs. ACE Startups Grant matches up a portion of the amount raised by you and provides mentorship and funding for your business idea. Then there is an Early Stage Venture Fund (ESVF) that partners with venture capitalists to fund early-stage technology startups. Singapore has also come up with an Incubation scheme under the National Research Foundation. In this scheme, NRF helps you secure funding of up to the lower of S$500,000 or 85% of your investmentGovernment funding options can be great for start-ups and first-time entrepreneurs.   

Go To Venture Capital Firms 

Obtaining funds from venture capital firms is another option to finance your business. Venture capitalists are professionals who support and fund the most profitable ideas and potential entrepreneurs. With the motive of gaining high returns on their investment. This type of investment can bring valuable expertise to your business. However, the funding option can be expensive as you may have to part with a bigger share of your company’s equity. Venture capital is also used to leverage investment in companies with little or no revenue in the early stages. But a strong user base to monetise later, for instance, Facebook and Twitter. These investments can also be used in companies that are generating revenue and are already profitable.  

Try Crowdfunding 

Crowdfunding is a great option for entrepreneurs who do not want to part with their ownership rights yet secure funding. Unlike traditional forms of financing, the method targets small amounts of capital. From a large number of ordinary people to fund their new venture. If you do not want to offer equity, you can offer investors the early access to new products and services or cash returns in the form of interests. There are various forms of crowdfunding options like donation-based, peer-to-peer, rewards-based, and more. While any aspiring entrepreneur can benefit from it. They are great for businesses or endeavours with a social angle or a noble cause. KickstarterIndiegogoCrowdo, etc., are some of the platforms facilitating crowdfunding.  

If you want to bring your idea to the market or you want to grow your business. Funding your business through any of these options can bring you the necessary finances. Make sure to analyse your preference and the investment option. To ensure you secure funding for your business through the most suitable option.  

 

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