sjsmith.com.au - blog
Show Me the Money
It can be no small thing to find a source of funding to help finance your business until it gets off the ground. While over 30% of small businesses are owned by women less than 3% of venture capital goes to female owned and operated businesses. Don’t be disheartened. Hundreds of thousands have found the resources they need to get going and there’s no reason you can’t do it too! You may also be thinking about finance to help you through a growth period. In which case, good on you!
If you’re lucky enough maybe you can secure a loan from a family member or a friend. Having done this to establish my first business I would recommend that you have an agreement drawn up about the amount, the repayments and any interest or penalties that you agree to. If you only need a small amount maybe you can fund it yourself. I would counsel against risky financing like mortgaging your home or cashing in any pension or insurance amounts. While success stories may make people who take this route seem brave, they are vastly outnumbered by those who didn’t make it and left themselves financially ruined.
You may decide to approach your bank or financial institution for a loan. Before you head down to see your local manager, make sure you’ve got some figures to present to them. What are your projected sales, costs of sales and repayment proposal? How much do you need to borrow and what sort of term and interest are you expecting?
It’s also worth checking out whether you may be entitled to any grants from your local government or small business branch. Some areas offer incentives to help you with funding staff in return for providing training for new employees. Maybe your local business bureau has funding options available. It’s also worth checking out if there any tax incentives available to you as a new business. Some areas are keen to support burgeoning businesses in their area.
There’s also a number of other avenues for funding. Organisations like business angels provide venture capital. Search for “business angels” or go to businessangels.com.au. You might try crowd funding such as gofundme, pozible or venture crowd. For small loans you might try kiva, which is particularly slanted to women’s loans in depressed areas of the world. I’ve also just discovered that if you have a business sales history with PayPal you may qualify for a loan from them.
Just remember, whatever funding you decide to use, do your research. Make sure you’re fully aware of the terms and conditions and what the interest may be.
Till next time,