Options for financing and your access to funds often determine whether your fledging enterprise will succeed or fail. So shop around, consider all the pros and cons, and find the best options that suit you and your business. Here are several common types of business financing options:
Angel Investors and Venture Capitalist
Angel investors are rich individuals with a passion for a certain area, so they'll invest for a long time, even when there is too much risk for banks. Venture capitalists are individuals or companies looking for profit potential in a certain timeframe. They have strict investment criteria, often specialise in certain areas, and take an active role on the the board so you lose some independence.
Commercial Loans
Commercial loans are attractive because they don't require entrepreneurs to turn over equity or company control. But servicing debt can drain a young company with limited cash flow. New companies may not even have access to bank loans if they have no operating history and no collateral to secure the loan.
Home Refinancing
This is a cost-effective alternative to other types of loans because they offer some of the best interest rates. But the downside is you risk your family home or other assets to launch your business - the bank can sell your house from under you at whatever price they want. So consider the risk involved before heading down this route.
Government Grants
It's also possible to apply for grants through the various agencies of the ministry.
Credit Card
Cash advances from credit cards are easy and quick. But for long term financing, they're expensive - interest rates typically run much more than the percentage you'd likely pay on a bank loan. Shop around for options.
TO be Continue..Bad debt consolidation
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