Funding your business
Understanding the basics of raising capital is a vital business skill. Whether you are looking to start a new business or grow your existing business, one thing is certain—you are going to need money.
You must consider many factors when exploring funding options, including:
- the amount of finance required
- the nature of your project
- your stage of business development (i.e. a start-up or an established business).
There are 2 basic financing strategies:
- debt finance - borrowing funds that you pay back with interest within agreed time frames (e.g. bank loans)
- equity finance - investing your own or other stakeholder's funds into your business in exchange for partial ownership (e.g. venture capital).
Remember, every business will have different reasons for sourcing finance and every funding proposal will have its own unique features. Therefore, you should seek professional advice from your accountant or business adviser before making a financial decision.
This guide will help you plan your funding requirements, understand the types of finance available to you and choose the best funding option for your business.