Financing, maintaining and managing a business venture can be challenging, especially when it comes to funding.
Inadequate funds have made some companies liquidate, while some merged.
Finance is the only grease that lubricates the wheels of your business. Without funds, there is no business.
I have listed 10 ways to finance your business below:
1. Loans
This is the most common way of financing business. You can borrow loans from banks to manage your business. To get a loan from banks, you must have a solid credit score—usually 650 and above—you must have assets, and you must be a regular taxpayer. However, it is very important to read all the terms and policies for giving out loans so that you can fully understand the business you are getting into.
2. Savings
This is the best way to finance your business independently. If you want to make it in business, you need to save daily. It is only when you save that your business can be saved.
See below how much you can make by saving daily for 365 days:
DAILY SAVING
- Save 100 daily — get 36,500 in the next 365 days
- Save 200 daily — get 73,000 in the next 365 days
- Save 300 daily — get 109,500 in the next 365 days
- Save 500 daily — get 182,500 in the next 365 days
- Save 1,000 daily — get 365,000 in the next 365 days
- Save 1,500 daily — get 547,500 in the next 365 days
- Save 2,000 daily — get 730,000 in the next 365 days
- Save 2,500 daily — get 912,500 in the next 365 days
- Save 3,000 daily — get 1,095,000 in the next 365 days
WEEKLY SAVING
- Save 500 weekly — get 26,500 in the next 365 days
- Save 1,000 weekly — get 53,000 in the next 365 days
- Save 1,500 weekly — get 79,500 in the next 365 days
- Save 2,000 weekly — get 106,000 in the next 365 days
- Save 2,500 weekly — get 132,500 in the next 365 days
- Save 3,000 weekly — get 159,000 in the next 365 days
MONTHLY SAVINGS
- Save 2,000 monthly — get 24,000 in the next 365 days
- Save 2,500 monthly — get 30,000 in the next 365 days
- Save 3,000 monthly — get 36,000 in the next 365 days
- Save 5,000 monthly — get 60,000
- Save 10,000 monthly — get 120,000 in the next 365 days
- Save 15,000 monthly — get 180,000 in the next 365 days
- Save 20,000 monthly — get 240,000 in the next 365 days
Choose any option you can be consistent with, construct a piggy bank, and say NO to reckless spending.
3. Friends & Family
You can borrow funds from your family and friends who have extra cash. The interesting part is that you get funds with low or no interest, while some may not request refunds at all, but learn to pay on time when you borrow from friends and family.
4. Crowdfunding
This involves taking a small amount of money from a lot of people to equal a large amount of money for investment. The success of your crowdfunding will depend on how well you market your proposition. Examples of crowdfunding platforms to choose from include IndieGoGo, Kickstarter, Seedrs, and Crowdcube.
5. Grants
Grants for small businesses are usually provided by the government, its agencies, or charitable organisations. The benefit of a grant is that you don’t have to pay it back. All you need to do is apply. If you meet specific criteria, you will be considered. An example is Innovate UK, which provides grants for innovation in some areas of the UK economy.
6. Invoice Finance
This is a source of income whereby companies are allowed to borrow against the value of invoices due from customers. This can be a better source of funds if you have many customers with long payment terms. This option is only available to companies with a very strong track record of revenue generation.
7. Business Overdraft
This is a good source of business finance for the short term. You can use your business current account to borrow an amount or make a payment from your bank up to a limit (known as a facility) that exceeds the available balance.
8. Merchant Cash
If you are using card terminals to receive payments from customers, you can receive a cash advance through terminal providers or lenders. The terminal providers can see your cash inflows and outflows, so they will provide funds based on the daily income in the credit card. Your repayments remain in the same proportion as your business income.
9. Asset Finance
This is a form of business financing that involves purchasing machinery or companies releasing cash from assets they own. This can be done through hire purchase or finance lease.
10. Business Credit Cards
This is one of the most common sources of funds for small businesses. Companies use the credit card for expenses without interest, but the outstanding balance must be paid off at the end of the credit-free period.