5 Ways To Finance Your Business?
Are you looking for 5 Ways To Finance Your Business? then you are in right place Every new business needs finance to start their business. But hardly few new businesses get finances and all it depends on the excellent new business plan or idea. If you want to develop your business on the innovative idea then the chances will be high to get more investors for your business. For example, Uber and Cream are based on the new business idea and now running their operations in the different countries of the world.
However, it is also not easy to get finances for the old businesses as they need money in the bad time. So what are the sources of finance for your business? I am going to describe different sources of cash for your business.
1. Personal Investment
First of all, look at your own pocket and see how much you can invest in your own business. How much savings you have in your bank? Have you any pension money? You can sell your extra property and can grab money to invest in your business.
You can enjoy tension free investment without paying interest cost. If you will take the amount from the bank you need to pay heavy interest with some obligations.
2. Relatives & Friends
Secondly ask your relatives like your father, brother or cousin for cash you need for your business. As you want to start your new business to show your plan to them. Hopefully, you can get a good amount of money for your business. After if you need more money than you can visit your friends and discuss with him your business.
The money from relatives and friends will be free from the interest cost and it will decrease your interest expense. You can easily return this money without pledging your assets. There is no need to sign an affidavit for such kind of finances. When you become successful in your business after six months or a year, return back the money to the relatives and friends.
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3. Issue New Shares
The company who is already running its business for years and want to expand its operations can go for the issue of new shares. By new issuance of shares to the public the companies generated a handsome amount of funds to expand its operations. This strategy works only for the medium or large size companies. The small businesses don’t fall in this category. The listed companies of different stock exchanges have the ability to issue new shares to its public.
It is a method to sell your debtors or receivables, this financing technique is mostly used in the apparel industries or the industry with low credit rating. Usually, a fee expense equal to 2 percent needs to pay to get money in advance; this fee is equal to 24 percent interest on the entire amount per month. So this is an expensive way to grab money. For detailed information on factoring, you can check out this guide
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5. Bank Loans
Nowadays, it is easy to find a bank loan for the business, a different type of bank loans is available in the bank industry. If you are involved in Agriculture then you can get agriculture but you need to bear the heavy interest cost approximately on every type of bank loans.
You can also get bank loans on specific interest rates by pledging your assets. After getting a security, bank grants the loans on the interest basis. So it also depends on the businesses from which source they want to get money. The company considers two types of finance sources, one is known as equity debt and other is known as bank debt. It is the preference of every company which types of money suit them.
Many microfinance banks are offering loans with the high cost of interest charges to the small businesses. this are 5 Ways To Finance Your Business hope
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