5 Workable Sources Of Finance Available To A Business

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[et_pb_column type=”4_4″][et_pb_text admin_label=”Text”]There are several sources of finance available to a business which every entrepreneur ought to not only know about, but to also take advantage of. The main challenge that most entrepreneurs face when staring their first business is raising the required capital and so knowing where to get the funds from (or at least some of it) is crucial as it determines whether you’ll succeed or fail in your quest.

The sources of finance available to a business that we’ll be looking at shortly will therefore come in handy to ensure that you get a few feasible ideas as to where you can raise capital for your business next time you get an ingenious business idea or just in need of more business finance.

Sources Of Finance Available To A Business #1: Personal Savings

If you don’t like saving or saving isn’t part of your vocabulary, then you need to get yourself into the habit of saving because it might very well save you from a lot of stress and worrying when the time comes for raising capital for your business.

The best way to train yourself to save is to discipline yourself to set aside a given percentage of your net income every month and put it into a savings account. You can even invest it in a viable business opportunity instead of it staying idle in an account gaining negligible amounts of interest.

Sources Of Finance Available To A Business #2: Contributions

You can seek an audience with your family and friends and explain to them your business idea. Afterwards you can request for contributions from them or even offer them a shareholding in your business in return for a given sum of money.

The main thing to note here is that it’s not an obligation on their part to contribute anything; so don’t go overboard or become furious if the outcome is worse than what you expected.

This is one of those sources of finance available to a business that heavily rely on goodwill and your ability to sell an idea.

Sources Of Finance Available To A Business #3: Retained Profits

If you have an existing business in place, then you can simply channel some of the profits from that business into your new business. If on the other hand you’re seeking funding for a business that has been running for a while e.g. 1 year, then you can channel some of the profits back into the business.

This option requires you to have previously run your business efficiently for it to have any profits.

Sources Of Finance Available To A Business #4: Partners And Shareholders Contribution

If your business is private, then you can seek additional capital from the various partners or investors and if it’s public, then you can seek additional capital from the shareholders.

Sources Of Finance Available To A Business #5: Loans From Financial Institutions

I decided to put this option as the last among the sources of finance available to a business because it’s my least favorite given the “strings attached”.

You need to be very careful when seeking loans from financial institutions especially when you’re signing the agreements. You might be overjoyed because of the amount they’re lending you BUT there can be clauses hidden within the document that can see you pay more for longer.

My Take On The Above Sources Of Finance Available To A Business

Although there are other sources of finance available to a business, I’m certain that the above 5 sources of finance available to a business will come in handy to help you realize that there are many avenues through which you can raise capital for your business.

You should therefore tap into the above disused sources of finance available to a business in order to fund your business operations. Throwing in the towel every time you lack finances to fund your business ideas should never be an option.

You just need to stop worrying and instead come up with a concrete plan as to how you’ll get the needed capital. Always remember that worrying doesn’t solve anything.

If you found value in the above post on the Sources Of Finance Available To A Business, then please comment below and don’t forget to share 🙂

(Sources Of Finance Available To A Business: Image above courtesy of Freedigitalphotos.net)

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