Having a great idea for a business is just the first step to creating a successful start-up, and before you get it up and running, there is something you will definitely need to get hold of – money. To be able to launch your enterprise, you need to finance the branding, premises, staff, marketing, products and equipment, often putting you in debt before it has started to take in money.
Here are our quick tips on how to finance your start-up, so you can concentrate on making it a success.
The government offers Start Up Loans of between £500 and £25,000 for those who live in the UK, are over 18 and need financial assistance for a company that has not been trading for more than two years. This type of loan finance will act like an unsecured personal loan, as opposed to a business loan, which means your own accounts will be liable if repayments are not made.
There is a fixed interest rate of six per cent per year, and recipients can take up to 15 years to repay the debt. What makes this finance attractive is there is no application fee or early repayment charge.
Forbes recommends using crowdfunding websites raise money, with people able to donate to business ideas they are interested in. They typically expect something in return for their funding, such as one of your products or a share in the enterprise.
“The key to successful crowdfunding campaigns is to have a compelling story about your product, service, or company,” the publication stated, adding that crowdfunding also helps to promote the business before it has even launched.
Entrepreneurs can apply for small business credit cards, which provide cash to invest in the company to be paid back over time.
The disadvantage of this is it is typically tied to the owner’s personal credit score, meaning any default on payments or late fees would result in a poor rating.
For help launching your business, consider start-up coaching today.