Start-ups need funding, but finding this funding can be tough. So, here are five ways that new UK businesses can get the money they need to grow and prosper.
- Utilize the Power of the Crowd
Even though the idea of crowdfunding on the Internet is still very new, entrepreneurs are finding that it can be a very successful way to get the start-up capital they require. Using personal funds, members of the public fund projects that they find interesting. In order to start, you’ll need to explain the products or services that your business will be providing. Then, your investors can decide to give you a lot of money or a just a little. When investors are promised a reward, such as the chance to purchase a new product at a discount price, they are more likely to invest their money. Keep in mind that United States law is changing and crowdfunding that is equity-based will soon be available.
Kickstarter, Fundable, and Indiegogo are among the best known of the crowdfunding sites.
- Seed Enterprise Investment Scheme (SEIS)
The Seed Enterprise Investment Scheme is a notably fantastic scheme for start-ups looking to raise money for their efforts. The scheme uses tax breaks to encourage UK tax payers to provide small start-up businesses investment.
The lucrative benefits that investors potentially gain from investment and also the fact that new and start-up businesses also receive lucrative terms makes SEIS a potentially very positive way of financing start-ups. Key Business Consultants provide a whole range of information on SEIS and are one of the leading UK businesses in the field.
- Let an Angel Invest In You
Once an entrepreneur, always an entrepreneur. That’s why many of them are always on the lookout for new start-ups to fund. Because of this, they are often referred to as angel investors. Google, Skype, Twitter, and Facebook are some of the largest companies in the world and got angel investors at a critical point in their development.
While angel investors bring needed cash, they also offer added benefits. Because of their experience, they often give great advice and provide valuable business connections. They take on start-ups and assume a great deal of the risk. In fact, there are networks whose sole purpose is to connect investors with up-and-coming entrepreneurs. Golden Seeds, Investors Circle, and Tech Coast Angels are three of the biggest. `
- Involve Your Family and Friends
Your family and friends are already invested in you as a person. If you have a potential goldmine on your hands, you might want to include them as investors in your operation. However, doing business with the people you are closest too does come with some very special problems. If things don’t go smoothly, you run the risk of ruining your relationships.
Even when business owners work hard and stay on top of things, they still run the risk of failure. Half of all small businesses shut their doors within five years. Because of this, don’t take money if they can’t afford to lose it. In addition, you shouldn’t just shake on the terms of the loan. Put any agreement into writing.
Just because there are pitfalls when it comes to mixing business with your friends and family, don’t rule it out. Many successful companies got their start this way. They kept their relationships intact and their businesses afloat by being mindful of the dangers. The best part of this kind of investing is that they will grow wealthy right along with you when your business grows.
- Head to the Bank For A Loan.
People have been getting small business loans from banks for generations and the tradition still continues. In order to get your loan application approved, you may need a guarantee from the Small Business Administration (SBA. When you meet SBA criteria, they will guarantee your business loan for up to 80% of its value. You can also offer security, such as your home or other appraisable property, to get loan approval.