How to Raise Capital for Your Business

How to Raise Capital for Your Business
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Capital is the major requirement needed in setting up any business. For a proposed business to be transformed into a reality, sufficient capital is always needed. Nowadays, many people have the desire to establish businesses but they end up with nothing due to insufficient means for capital formation. In as much as capital is key to setting up a business, it is very important to discuss some of the surest ways people can raise capital for their proposed businesses.



Bank Loans

Although it isn’t as encouraging as personal savings or financial aids from friends/relatives, obtaining bank loans is another way of raising capital for a business. Bank loans are obtainable but the financial complications attached to them might discourage you. Most banks require that you fulfill certain conditions before they can grant you loans. Moreover, many banks are not interested in lending money to average people who are just willing to start businesses. Instead of that, they prefer to lend money to business owners who have stable businesses backed by reliable business records. Nevertheless, a number of micro-finance banks do not usually require collateral requirements in lending money to people but before you’re eligible, you need to have fulfilled certain conditions such as the ability to pay back the loan.

Friends and Relatives

Friends and relatives are very important and no sane human would actually value a solitary life. During financial difficulties, you can easily resort to your friends or relatives to assist you in bouncing back. In the event of raising funds/capital for a particular business, friends and relatives can be of great help. But before you approach your relatives and friends in this regard, ensure you have raised some reasonable money through personal savings. Doing this is the best way you can convince your friends/relatives that they won’t regret supporting you financially. Suppose that the proposed capital for your business is #40,000, you, as a serious-minded person, are expected to have raised at least #20,000 through personal savings. Also in this situation, you need to meet a number of relatives/friends because a single friend might not be capable enough to help you with the remaining #20,000. If you meet five loyal friends and make them realize the amount you have raised personally, each of them should be able to contribute #4000.


Personal Savings

Personal savings is one of the surest ways to generate capital for your business. In fact, it is the best way you can avoid depending on people before setting up your business. Even if your personal savings is not sufficient to establish a particular business, friends and relatives can be urged to support you if they observe that you have shown strong financial commitment through personal savings. Speaking candidly, most of the successful entrepreneurs started off with personal savings before they could receive support from other sources.
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Saheed Soliu

Chemist,Science and Tech blogger. Research enthusiast and chief defender.Blogging is fun and sharing knowledge makes true happiness valid. Have fun while your here.

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