The Most Effective Ways Of Raising Capital For A New Business?

[Rachael]

Although it is not possible that every individual would have the drive or passion to venture into a business line but at times, most people have the desire to own a business either passion-driven or profits-driven but the major challenge is always the unavailability of the startup funds. This challenge has made many business ideas which would have been productive go down the drench and those who are high achievers and seem not to have an alternative do opt for the first option on their minds which is obtain loans from either financial institutions or money lenders but in most cases, we know how negative the story ends especially if a crisis like the covid-19 pandemic which is out and beyond of the control of business owners.

There are other alternative methods of raising capital for a new business without taking pressurizing loans. It is quite distraughtly that some entrepreneurs would sign up for loans with high interest and short duration to repay without determining how negative the loan would have on the business. Feasible ways of raising capital include; crowdfunding through donations, opting for investors with your business idea and business proposal, using our personal savings to start up a business and through partnership to reduce the burden of high cost.

 

[TOZZIBLINKZ]

To be sincere and honest , it has never been easy to establish , develop , furnish , facilitate , control , and own a business which you can call your personal established Enterprise or business outlet . Even business owners today can testify to this truth . One of the Major hindrance an obstruction that have made individuals who have the intention to establish their business ideas today is the lack or present of insufficient capital . Capital is considered to be everything in business , and if you have the capital to establish your business the remaining factors like location , environment population , nearness to market etc . are usually easy to find or accomplish .

Majority of individuals living in developing countries in West Africa like Nigeria to be precise , are no longer waiting for the government to give them funds and financial grants or helps , to establish the various offline business they intend to establish . You may ask what then are they doing to get capital ? Well , majority of business minded individuals today have taken their time to work on various online jobs , thereby accumulating wealth which could serve as capital for them to establish the various offline business of your choice . if your intention is to establish an offline business and you do not have the capital to do so , why not take an online job either as a freelancer , as an affiliate marketer , as a dropshipper etc so as to earn considerable and meaningful amount of money online . And as you accumulate this earnings , they could turn out to be your capital to establish the offline business of your choice .

 

[Kendy]

There are many ways to raise capital for a growing business other than taking of loans. To me, due to my previous encounter with what comes with taking loans, no matter the feasible business idea I have right now, I would never opt for loans. The situation was worse because it was not long, after I got the loan, the pandemic occured, which till this moment, I still battle with the effect of the covid-19 pandemic.


I have been in situations where I see myself in a dilemma of where to get funds and there are possible solutions such as; crowd funding - as the name implies, crowdfunding is a typical way in which am individual raises money by seeking the help and support of the crowd. In this method of funding, at times, the individual might not reach the required target but at least the money would be enough to cater for part of the business. Another way of funding a growing business is through; opting for investors - investors are those people who fund a business they fathom has high level of feasibility, this is one good way of funding I normally prefer because it would spark the motivation of the business owner to keep up with the agreement.

 

[Chibson]

Even though, it is not really bad to take a loan before venturing into a business but it comes with some dangerous demerits that can actually make you go into bad debt if you could not make a lot of profit with it.

I always advise people that have businesses that are successful and wants to expand it to take loans because they already have proper knowledge of of the business and they can easily get a lot of profit with it.

But people that are starting newly, it doesn't make sense to take a loan because you don't have proper knowledge of how business works and you probably have not been into any business before.

There are several ways you can raise money to start a business without taking a loan.

One of the best ways of reason business capital is selling of your properties. Everyone or let me say, almost everyone have properties and it makes some kind of sense for you to sell some of your properties in order to raise capital to start your business.

Another good way in which you can raise a business capital is through crowd funding. This is usually very effective if you are the kind of person that is quite popular.

 

[btaliat]

Raising capital for business is the toughest part of organizing business. Most people even fed up when it comes to this part and they prefer to let go of their dream business just because capital cannot be raised for the business.

However, nowadays, there are several ways by whichoney can be raised for business. This has made starting a business so easy. But just like the topic asks, the best way to raise fund should be through personal saving. This is most effective in the sense that no one will be running after you for the repayment.

How can we have personal saving? There are various ways by which people can save money these days. Most time, people that have high salary do find it easy to save money. They always make sure they even save before they spend. We need to have the culture of setting aside see part of our money for the future use.

Aside this means of raising fund for business, we can also make sure that we raise money through family and friend. When our business idea is okay, there is tendency that many people may want to support us and make sure they give us money for whatever things that we want to do .

 

[sincerem]

You can get a business loan through VCs. If your business format is promising, and you make it easier for VCs to understand, you might win the heart of one of them, which can help you raise an angel capital for you. Meaning, he has bought shares in your business, you can negotiate with him or her how the angel investment can be paid back. At times it is based on percentage you make from your business or project. You'll give the angel investor his or her commission, and you keep the rest to yourself. It is better off than taking a loan from the mortgage bank which puts you under pressure. Because with loan, you'll be thinking about how to repay and stay afloat. Not all loans goes as planned due to the pressure that associates with it.

An alternative to me, is going through savings, save some percentage of income you're earning from your active jobs gradually. You can get there with time, and raise the needed business capital for yourself, which will keep you at the safer side, and not thinking much about how to pay back the money you borrowed from a loan company or money lender.

 

[Jasz]

Looking for the most effective ways to raise capital for business? The 4 distinct ways to raise start-up funds for a business are: debt, owner investments, equity financing and grants. Owners provide funding for their businesses in several ways. The sources of capital include loans from banks (also called debt financing), the use of personal assets, owner investments from cash earned from a job or an investment, and equity financing – which includes venture capital, angel investors, and private equity firms (which are called equity investors). Each method has different characteristics that make it useful for certain businesses but not others.

Equity financing is the process of obtaining capital from investors in exchange for a share of the ownership of the company. Debt financing is secured against an asset that the borrower owns, such as a home or business. The borrower can also use credit cards to start a business. Most entrepreneurs need both types of funding.

If you plan to float shares in your company, equity funding might be for you. It's sometimes referred to as venture capital, but there is a growing number of alternatives to this traditional route. Equity funding means that investors buy shares in your company and make a profit from any increase in the company's value – but are at risk if the company goes bust.

While there are other methods of raising capital, these 4 main methods are the most prevalent when looking at broad industries.


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