How To Get Funds to Promote Your Newly Started Business?
Financing your business in any economic climate is quite challenging and especially in the current climate. There is, however, a number of options available to help you finance your business. No matter what you are looking for whether its start-up funds, capital to expand your business or liquid cash to deal with tough times there are ways to obtain money. Below are some of the ways in which you can finance your business.
Bank loans are the most traditional and conservative way to acquire additional finances. However these can be hard to get. Banks require collateral as a guarantee for your loan. For this you can put the office equipment (assets), land or personally guarantee the loan with your home as collateral. A business loan from the bank is similar to a mortgage loan which has a fixed interest rate, fixed monthly and quarterly payments. A disadvantage of this type of loan is if you fail to repay the loan then the bank are entitled to what you have put up as collateral. The banks will seize your property and even sell out the property to claim back the loan amount.
Friends and family
You can ask your friends or family members for their support to manage the financial crisis your business is in. When you are receiving help from your friends and relatives, it is better to maintain formal documents and agreements so everything in order to maintain peace in your relationships. It is better not to make them your business partners. Consider the funds you borrowed from them as a loan and pay it off with interest. Although there may not be as much interest as a bank loan would have, if any at all. The repayments may be more suitable than that of a loan from the bank.
These payday loans are ideal when you encounter short term financial problems and when you need money instantly. The interest rates are little high as these are short term loans. The funds obtained by these loans can be used to meet your current liabilities. These loans do not require any collateral. You can avail these loans even if you have a poor credit rating. You have to repay these loans on your next pay day or an agreed date. You can also extend the term of payment but some additional fees may be charged.
When you encounter a financial problem while running your business, you can also make use of your company credit cards. These allow the option of obtaining cash advances which you can repay at a later point in time. Going into your overdraft though may prove expensive as the interest rate could be high. So, make use of this method cautiously as it is very risky if the business does not produce the expected results and you fail to repay the credit card provider the amount you borrowed the interest keeps adding up and the more debt there will be.
Author Bio: The guest post was contributed by Alicia, financial guest blogger from Manchester, UK. Find out more about her finance related blogs @financeport.