HOW TO SOURCE FOR FUND TO START YOUR BUSINESS

Thosynho

Member
A major problem confronting budding entrepreneurs is the challenge of how to source for fund to start the business they have conceived. This singular problem has made lots of potential entrepreneurs to abandon their dreams because they could not raise money to fund the idea.

There are quite numbers of ways to source for fund and some of them include:
1. From banks or any financial institutions.
2. From cooperative society.
3. Thrift and
4. Family members and friends.
The fourth one happens to be the best way to source for fund to start up a business after which one could now decide to consider any of the remaining 3 to expand the business.
 

Jonaville

Active member
Trust me it is not advisable to borrow money or take up a loan to start up a new business. Most times, it doesn't end well. This is because it takes time for a new business to thrive, and along the way the business can experience a lot of disappointments and letdowns. Imagine having to repay money you borrowed at that particular time. Surely it won't be easy. So like you said, it is best to approach family members or close friends and explain your situation to them. They might be able to help.
Moreover, in my country, the government gives grants, money you can use to start a business. It is non repayable. Check if your government has that provision too.
 

Thosynho

Member
Trust me it is not advisable to borrow money or take up a loan to start up a new business. Most times, it doesn't end well. This is because it takes time for a new business to thrive, and along the way the business can experience a lot of disappointments and letdowns. Imagine having to repay money you borrowed at that particular time. Surely it won't be easy. So like you said, it is best to approach family members or close friends and explain your situation to them. They might be able to help.
Moreover, in my country, the government gives grants, money you can use to start a business. It is non repayable. Check if your government has that provision too.
Thanks for engaging, it's not every potential entrepreneur that can afford to raise adequate money to start a business without taking loans or thrifts. So in a case where you can not raise the needed money and government and ain't given her citizens grants to venture into business, borrowing is inevitable. Therefore, from all the different options provided in the write up, borrowing from family members or friends is the best option because they could understand your plight in case something go wrong. That's my point here.
 

Josemendez

Verified member
I think all these sources of capital for start up business is quite efficient ,but it will be better when business is built from personal savings or money from friends and relatives.

This is because money from banks comes with interest ,and paying back this money with the interest is always a burden for start up business. The fear of losing the collateral used in securing the loan prevents the owner of the business from taking calculated risks.
 

Mcwally

New member
A major problem confronting budding entrepreneurs is the challenge of how to source for fund to start the business they have conceived. This singular problem has made lots of potential entrepreneurs to abandon their dreams because they could not raise money to fund the idea.

There are quite numbers of ways to source for fund and some of them include:
1. From banks or any financial institutions.
2. From cooperative society.
3. Thrift and
4. Family members and friends.
The fourth one happens to be the best way to source for fund to start up a business after which one could now decide to consider any of the remaining 3 to expand the business.
One of the way you can raise money for your business is thru bank but the challenges we have with bank is their high interest rate. But if you can have any wealthy relations or friends it is better than taking bank loan
 

Olajidey

Active member
There are many ways for you to source for money to start business. If you have the collateral you can go to bank and request for loan or you can join cooperative society to get loan and you will return it at a particular period of time. If you have a Uncle or any family members that you know they can assist you can also get money from them and you start your business with it.
But the best is to avoid to start business with borrowed money.
 

Ephy

Active member
A major problem confronting budding entrepreneurs is the challenge of how to source for fund to start the business they have conceived. This singular problem has made lots of potential entrepreneurs to abandon their dreams because they could not raise money to fund the idea.

There are quite numbers of ways to source for fund and some of them include:
1. From banks or any financial institutions.
2. From cooperative society.
3. Thrift and
4. Family members and friends.
The fourth one happens to be the best way to source for fund to start up a business after which one could now decide to consider any of the remaining 3 to expand the business.
They're are different ways on how you can get capital to start a business provided you have the right ideas. You can easily generate capital from your friends, families, partners, government or organisation. But you have to come up with strong ideas that will be more easier to convince and make someone trust you and trust your idea too. You have to come up a business plan that will explain how you're planning on doing the business and it must be easy for anyone to understand. Also you can get funds from your own savings.
 

btaliat

VIP Contributor
Nice write up. To be candid, I don't skesdy advice people to borrow money for business. Business is already of two sides. It may be negative when we have put all hope on it that it will be positive. That'd why it is better to save to start a business
 
D

Deleted member 27180

Guest
Start by the people closest to you and people who can support you. They include parents, friends, colleagues and church members. There are also angel investors in our communities who might be ready to fund your business idea if its convincing enough and they are comfortable with it. Some NGOs are also out there scouting for brilliant business ideas to fund. Reach out.
 

Alexandoy

VIP Contributor
If your point #1 about the bank as a source of funding means you are going to take out a loan for starting your business then you might as well forget it. The first requirement of the bank is the capacity to pay. If you have no business yet since you are just to start so that means you have no capacity to pay. Even if you have a collateral I don’t think your loan application can be approved by the bank manager. FYI there is a panel of executives that evaluates the loan applications for approval.
 

Donkiz

Active member
I will never support the idea of sourcing for fund to start a new business from banks or financial institutions, because you never know if the new business will do well or not.

Starting a new business comes with lots of pressure, so it won't be wise to add the pressure of bank loan to it. Having a loan with double digits interest rate, like what is obtainable in banks, in the early stage of business makes one to become desperate which usually results in making bad business decisions.

The best source of capital for a new business are personal savings, funds from family and friends. You can go for loan to expand the business after it has stabilized.
 

kayode10

VIP Contributor
Kudos to you guy, as you list good sources of raising capital for someone's business. I think I feel like there one more too, which is needed to be hard to your list. I will do the needful and list add it here.

Angel investors: these are private investors who have a lot of money at this POS are to throw around but lack a good business idea to run with the money.

As a result of this, the look out for people with a good business ideas that has huge potential but lack capital. Once define your business idea convincing and has good potential, they are going to sign a deal with you.

It can be very hard to locate this angel investors by yourself. One of the best ways to see them is to go through venture capitalist.
 
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