Are you an entrepreneur and looking for funds for your startup? Then you need to explore the different sources. In this article, we are going to share some funding sources. All of these sources can provide you funds but it depends on you; which source best suits your needs. We know that choosing the ideal one is always difficult. Many companies help an entrepreneur in forming a company. For more details, you can visit Your Company Formations Ltd. Following are some funding sources with brief explanation:
Family and Friends
One of the best sources for finding capital for your business is from your close friends and family members. If you will ask them, they will probably be willing to help fund your new company. They will not assess your business feasibility report to do so. They will do it for their relationship with you. This type of funding is only for a kick start for your new business.
- Flexible and fast funding process.
- The friends and family will provide you funds without knowing the business plan.
- They can only provide you with initial investment. After that, you need to find another source of funding.
If you will fund your new company with your savings, then you do not need to owe someone in the process. It is a great source of initial funding for your new business.
- You can invest your money anywhere you want. You will have the full control
- It will also provide you with a satisfaction that other’s money is not at risk.
- If your business fails, then you will be lost everything you had.
- You will not be able to get advice from angel investors.
In this type of funding, you gather funds from a large group of people via the internet. You get funds from your network of people which can include your colleagues, friends, and family via social platforms. This type is really good for finding good investors for your new business.
- A great source for expanding your business by getting investment from a pool of investors.
- However, you need to put some time and effort to make it work.
Angel investors are wealthy people who are ready to invest in a new business. In return, they will want equity in your business. These investors will assess your business plan before making any decision.
- They can provide funds and also valuable guidance and advice for your new business.
- You will need to give the control of your business to the investors.
If you have a good credit score then you can also get funds from the bank. Make sure that you know the rules of bank loans before applying for one. Every bank loan has different options and interest rates.
- Many funding options available.
- Quick than other funding sources.
- Do not need to hand over the control of your business.
- You will need to return the money even if your business fails.
- You need to do a lot of paperwork for applying for a loan.