Ways to fund a new business
If you want to start a new London business you are probably going to need some cash to get it up and running. It can often be difficult to get the funding you need, but fortunately there are multiple ways of doing so.
Here are a few of the ways you can acquire funding for your new business.
London business Bank loans
Even though banks are apparently now very reluctant to lend to small businesses, it is still possible to secure a small business bank loan.
You will need a good London business plan, and you will need to think very thoroughly about when and how much money will be coming into the business after it has been created.
A business angel is somebody who invests their money into your London business in exchange for a stake in said business. What’s great about business angels is that because it isn’t a loan, you do not have to repay them, and they also bring with them their own skills and experience.
You are probably most familiar with business angels through Dragon’s Den, but it’s worth noting that going to a business angel in real life doesn’t have to be such a scary experience.
A business angel could be somebody you already know, or somebody you have met through a funding network.
Money from friends and family
When considering using money loaned or given to you by family or friends, it is worth noting that it can cause big problems if anything goes wrong or if there are any disagreements.
However, there are many benefits from borrowing from friends or family to start your new London business. You can usually get much better interest rates (or no interest at all) if you borrow from family, and it is also a good sign that they believe in what you are doing – this moral support is going to help you a lot when business gets tough.
You can also offer to give them ownership of a percentage of the London business rather than a loan that needs to be repaid.
Crowdfunding through online platforms such as Kickstarter or Indiegogo allows lots of people to give money to support your business.
It is often new ideas, such as a new piece of technology, that get the most attention, but it is still possible to use crowdfunding for more conventional businesses as long as you can persuade people of its benefits.
Start with nothing
Not all businesses need to start off with lots of cash. If, for example, you want to start up as a consultant, you could probably start off with just a laptop, a mobile phone, and your own website. You could also probably work from home, saving you from paying office rent. Once you start making money, you can put it back into the business to grow it.