Starting A New Business? Here Is How You Can Finance It

Once you decided, it is time to start. The first step is to know how to start. Plans, objectives, roles all that must be clear. But when you start, the most important thing is to know how to finance your new business. The problem with most businesses is that there is not enough capital to sustain a project in the first months. Where most of the time, there is no profit, and in some cases, there is so much loss. It is a reality that a business does not grow only with the money we have. So looking for options to finance our business is the most logical.

However, this step is not easy, especially because of the vast sea of ​​options available today. If you want online small business loans, you can search and get amazing ways to find the best strategy for yourself.

First step: see profitability

It is for all the options that you have. So before looking for how to finance your project, the main recommendation is that you develop a good business plan. That plan allows you to make accounts and determine if your idea is profitable or not before investing a single cent.

If everything goes well and your business is profitable, the next thing is to make a realistic calculation. That will let you know when you see the first profit weight. These steps will help you to know the viability of your business and then analyze the financing options.

What financing options does an entrepreneur have?

We will not rely on institutions. At this point, we will talk about ways in which you can obtain financing for your business.

Partners with capital

One of the options most used by entrepreneurs is to use the figure of partners with capital. Basically, we talk about contacting people of your entire trust to tell them about your project. You then reach an agreement, then they finance your business or even associate with you.

Although it sounds good, it is a reality that not everyone is willing to lend or invest in a business. But you must get ready because you are most likely to be asked for something in return. Such as a participation in the ownership of your company or business.

Government Credit

Another common form of financing is government credit. For some, it is a good option since it is money that the state has to support entrepreneurial activity.

The main obstacle to requesting credit from the government is that you must go with your business project to the agency. So that a specialized staff evaluates its viability, it will be that official’s verdict that determines whether they give you the money or not.

Just remember that getting a government loan, you will not be the only person to request it. Usually, this type of financing they delay because of the saturation of applications.

Angel investors

Another financing option is angel investors. They are specialists who finance business incubator projects. Remember that incubators are places where they help you land your idea and give you support in your early stages. So that your business gets well developed.

Collective financing

Collective financing is recent as it was born from the Internet. It is a financing modality in which you register your project on a platform in search of many people around the world. Those people usually contribute their money to your business after seeing all business elements.

The main problem is that it is not always a guarantee that you receive what you want. In addition, the platforms can charge you a commission on the capital you raise to finance their operation.

Traditional banks

Of all the options so far, this is the most common form of financing among entrepreneurs. However, not everyone achieves it.

It is a reality when you start undertaking, you do not have extensive experience and verifiable income. It is just that the main problem of the banks. They demand to demonstrate credit experience and that the company is already generating cash flow to honor the debt.

Own funds

It is the traditional formula for starting a project and also the most common. In fact, according to the   South Summit 2018 Entrepreneurship Map, 60% of entrepreneurs use this route as the first source of funding. It is still the most useful funding option for your business.

Within this option, but in a more advanced phase, they frame a Bootstrapping that is a type of growth by which the start-up can generate its resources. It does not need other funds. In this way, the entrepreneur does not transfer the capital of the company to third parties or pay interest. However, it loses advantages such as the advice or knowledge provided by private investors.

Bank financing

With bank finance, the business owner can continue to maintain control of his capital. However, getting this type of credit in businesses that have just started and have no assets or form of support can be complicated. This situation became widespread, especially during the years of the economic crisis, in turn to the impulse of another type of financing. These finances include private investment that is increasingly common in the entrepreneurial environment.

Fintech

With the exploitation of the Internet, Fintech calls began to emerge. We talk about a new financial industry that applies technology to improve financial activities.

Among all the options, Konfío stands out with its mission to boost your business. Among the benefits you get by requesting a loan for your business are:

Fixed-rate

Unlike other financial institutions, in Konfío, your interest rate will not change. From the beginning, they calculate the interest rate of your credit, depending on your credit history and the turnover of your business. Also, for getting business credit, you will not pay VAT, and you can deduct it from taxes.

Short term credit

Unlike other types of financing, their credits are created to cover your short-term working capital requirements. So that you can finance your business operations without sacrificing liquidity.

If you want, you can invest in actions that generate immediate value, so you can pay between 3 or 12 months and thus start again whenever you want.

Your process is agile and safe

Surely you have suffered the times that a traditional bank takes only to analyze whether they give you a loan or not. These processes can take some days or even weeks, and you have no guarantee that your request will be successful.

That is why, in Konfío, they seek to give you maximum attention to react quickly to the business opportunities that arise. The process is designed to complete your application in just 7 minutes and receive an immediate response.

Conclusion

With all these suggestions, you will no longer have to visit many money-lenders. All process is 100% workable, so you do not waste time and focus on creating strategies for your company. But if you have any questions, you will always have a lot of internet guides on your computer and smartphone to give you the best advice.

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