If you start a business but need some financial support to start or develop your business activities, then this article is for you. We will take you through many choices of increasing finance and giving you a list of advantages and weaknesses for each option for you can make the best decisions for you and your business.
Open a new business account today.
At this time you have to know how much it costs but if you want to enter a fee into the cash flow / user-friendly profit template.
What is my choice?
The following options are available for you.
Bank error:
A bank lecture gives customers short-term financial support but will be reviewed regularly by the Bank manager and may need to be paid back on a short time scale.
Upside.
-Short financial support to start
-Delivery of money from the bank this way is relatively fast
Downside
– can be expensive at high interest costs
-Bank may require personal guarantees
-The levelInterest may be a variable so that it can fluctuate from time to time
Bank loan:
Bank loans are long-term financial support and can have a fixed interest rate so you know what you need to pay back. This is very useful for one per event like preparing a business, making new products etc.
Upside.
-Wrowrowing is for a longer period of time
-The flower level can be fixed and you can predict your payment
-After paid back you still have full control & ownership of business
Downside
– can be expensive because of the interest rate
The bank level might want to spend time with you to understand the business and ask for your interesting financial statements away from your customers.
-Bank may require personal guarantees
-Repayments are usually not flexible and will require you to pay a certain amount of the agreed term
-Loop can be secured by company assets and you can lose assets if the loan is not repaid
Shares Creation:
If you have a limited company, you can sell parts of the company to people who might be interested in investing in business and taking part of profits.
Upside.
-If you want to have a limited company then you can sell shares to someone in exchange for money
-People invest in your business can also provide some management support in developing business
Downside
– Understand the value of subjective shares and disputes can appear
– Compact making may be less flexible if shareholders want to be involved in business.
-There might be a conflict of interest between you and shareholders about what must be done with business as a certain interval, especially if someone submits an offer for this business.
Friends & Families:
Families and friends that you have a good relationship may also want to support you and your activities and lend money to you.
Upside.
-There this might not be a rigid bond with loan administration compared to banks and investors
– Money arrangements may be faster than other loan options.
-Marning borrowing costs will be cheaper than other settings
Downside
-No agreed upon at the beginning of the number of interest or time to pay debt can be debated
-Tebts between friends and family can affect relationships, especially in difficult times
-Panjang and loan award may not be stable because it depends on their situation not only yours
Investor:
People may want to invest in beginner companies in return for business share
Upside.
-Investor can provide some support to you in running a business
-Investor can take more risks and invest more into business compared to banks
Downside
-Investor may take time to achieve a decision about your business
– Investor costs may be quite large if not through return returns but with their ownership in business
– Your decision-making process may be slower if they need to be approved by investors
