Securing the money that you need to start a new business is one of the most difficult tasks for any potential entrepreneur. Here at WinWeb, we understand your pain and have listed the five most popular finance sources so you can decide which one is right for you:
Personal savings: It can take years to put aside enough money to finance a small business and for many people, putting away money each month is a financial impossibility. But, if you can manage it, running a business financed on your personal savings means you won’t have to rely on anyone else or get in debt.
Second job: Many entrepreneurs have to work multiple jobs for the first few years of their startup. Although this is often required financially, the toll on the mental and physical health of the individual can be rather extreme. It can put great strain on families and relationships, so bear this in mind before attempting it.
Friends & Family: Some people are lucky enough to have friends and family who believe strongly enough in their business idea to risk their own finances to get it off the ground. The obvious drawback to this is that if the business were to fail, your friend or family member would lose their money and this could have an effect on your relationship with them.
Government grants: This is potentially a great source of finance for small businesses, but it can be extremely difficult to get anything close to the amount that you would actually require to start up. You could spend a lot of time chasing up a dead end with these grants.
Bank loans: These were always traditionally one of the most popular methods of getting financial assistance for a start-up. However, banks are now extremely picky about who they will lend to and when they do actually lend to someone they hit them with massive interest charges. This is definitely one financial option that should be avoided at the moment.