Whether you want to start a business or expand an enterprise, you are going to need money. Credits from vendors or suppliers are hard to come by. Even if you can manage your books in a savvy way wherein funds keep rolling and facilitating some growth, the expansion would be nominal. It is possible to start a business with very little funding but eventually you will need to raise money if you have to turn a startup as a hobby or passion into a serious business. Here are six ways you can raise money to expand or start a business.
- Ask your family, friends and other prosperous people you know. This is a nonstarter if you don’t have a wealthy family, fairly rich friends or influential contacts. If you do have family or friends who are capable and willing to lend you money, then you should be lucid about the arrangement. You can treat it as a loan that you would pay back in due time. You may even offer some stake in your company. It is better to treat small funds as a loan. Giving up a part of your ownership for some money is an unwise move.
- You can explore loans and grants. There are many types of grants available for specific types of businesses, right from farming to food processing, technology to green energy. If your business and the industry you are in qualify for such grants, then raising funds can be rather easy. However, you should get familiar with the technicalities. Grants require a methodical and extensively detailed application. Loans are easier to apply for than grants but they are obviously more extracting. Small business loans can have substantially high rates of interest. Besides, you would have to prove that your business has a sustainable revenue and scope of growth to get approved. Or, you would need enough tangible assets to use as collateral for the loan.
- Angel investment is one of the best options to raise money. Angel investors are high net worth individuals who would infuse your business with a reasonably handsome figure and would take the risk of losing that money if your business fails or does not succeed following an expansion. In exchange, you should give up a part of your ownership. Angel investors don’t necessarily make any sea change in how you would run your business but they can offer priceless advice.
- Hedge funds or venture capitalists are another worthwhile option. Venture capitalists are slightly different from angel investors, although both have similar expertise and deep pockets. Venture capitalists or hedge funds would look for an exit strategy and they would recommend or make changes to your business accordingly. This is not ideal if you want absolute control over how you operate your business.
- Crowdfunding is one of the more contemporary means available to all entrepreneurs, especially interesting startups. There would be no technical expertise or guidance available but enough funds can be raised to start a business, manufacture a product and even expand the operations.
- Finally, if all options fail, then you would have to fund your enterprise yourself.
About the Author
Morris Edwards is a content writer at CompanyRegistrationinSingapore.com.sg, he writes different topics like FinTech Startups in Singapore and Singapore’s Economy Is Expected to Grow This Year and all topics related to Tech and Business, if you are interested about Singapore Business Setup visit our website or contact us.
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