When one decides to start a business, one thing is for sure; they need a starting capital. The initial costs come as a result of giving the business what it needs to take off like products, human resource, and overhead costs just to mention but a few. In Most cases, people rarely plan for this or even don’t have it. There are various ways one can have capital to start of any business. So, below is a list of various possible sources.
How to finance a business startup
Savings from income
It is common to see people save for a future business they intend to start. The savings from income can be done through a bank or any other savings institutions. While saving can take long depending on the income per month, it is the best way as they business will kick off without loans or debts. The best way to save is using a fixed account to avoid temptations of making a withdrawal before, the time comes.
A loan from merchant lenders
These institutions specialize in helping business oriented people to finance their businesses. The merchant advance come with low interest rates, and their terms and conditions are usually favorable. If you intend to have a business startup, it is good to discuss this with them so that they can give a grace period before repayment commences.
Borrowing from a friend
If you have a friend with a lot of money at disposal, then you can take advantage of the interest-free loan to start a business. A friend will also not rush or give too many conditions while giving the loan. If they are in business as well, they can act as mentors to provide a necessary advice one needs to succeed in business. However, this method can make one lose a friend especially those who do not honor the agreement.
From a financing investor
Some big investors who own big companies and organization are usually willing to help others make business start up. In such a case one needs to write an interesting business plan which will convince the investors that they don’t stand a risk to lose their money. The agreements may differ ranging from how the two will share the benefits and loses to time durations of attachments.
From the above list of business startup capital sources, it is evident that one stands a chance to open one even without own money.