Lack of funding restricts a business start-up. Cash is the key to start any business and it is good to know what ways business can be financed.
Debt is a loan. This is considered a relatively Cheaper Source of Finance. As a start-up or growing business, you can go to the bank and get funding in the form of a loan or overdraft facility in exchange for interest payments and monthly installments payable over an agreed period of time
Important
Banks want to see if your business has the capability, capacity, and potential to be able to repay the money borrowed and the business should be able to pay the installments when falling due.
Investors could set as preferential Shares or Seed Capital
There could be tax advantages if the BES scheme or other schemes depending on the applicability and utilization.
Equity can be used to leverage bank borrowings
Money can be raised from a private investor, family friends, or relatives, or a person of acquittance.
The benefit of raising equity is that it has no obligation to repay funds however, Equity financing is expensive to Entrepreneur as the Return percentage could be high for the company.
It depends on your investor it could be a benefit or can be a distraction.
1) Invoice Discounting
2) Visa Business Cards
3) Asset Finance
4) Leasing
5) Hire Purchase
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