Many people are shifting to business nowadays. Well, people have different reasons as to why. Some think that being self-employed is easy and pays more compared to staying in the office all day working for someone under strict rules and regulations. Other people want to have more than one source of income. As they work under employment, they still want to earn something more, and that is why they choose to start a small business. It is small businesses that grow big. To start a business, you will need capital. Many people face challenges on where to get finances to start a business. This article will give some options of where you can source your business capital.
Sources of capital
This should be the number one source of capital when you think of starting a small business. If you are employed then most likely you have been putting a percentage of your salary aside as savings. When a business idea crosses your mind this where your capital should come from. If you are a student, your parents send you some pocket money and upkeep. Wise students keep something aside as savings. On an event of wanting to start a business, you will have money of your own.
Family and friends
This is another source of capital. The people around you can lend you money to start a business. If you present a good business idea to your parents, there is a possibility of getting cash from them to start. Your siblings and friends can chip in as well. The advantage of money from family is that it is not a must that you pay it back even if you had agreed on giving it back. In an event the business does not work, they will be lined with you.
If the options above cannot apply to you, then you can approach a bank for a loan. The loan manager will listen to your idea, ask you for loan security and repayment period. You will be required to fill in loan application forms. If the bank finds it that you qualify for the loan, then you will be sorted. The disadvantage with bank loans is that you will have to pay it back and with interest. If the business fails, you will suffer huge losses because you will have to repay the money loaned plus interest for something that did not work. It is therefore important to consider the first two options before getting a bank loan.
…Read More →