Finding the cash to start your business is easy if you are aware of the available sources you could explore.
Your own cash
You may start your business using your own cash. Maybe it is the only available sources of funding for you. Sometimes getting funding from the banks, building societies or other financial institutions may be challenging because there is no track record of trading with which to demonstrate your business’s commercial viability and ability to repay.
The advantage of using your own cash to start your business is that you are able to retain full control and ownership of your business. You do not have to give personal security on your business loan.
However, there are disadvantages to this approach where you may not have sufficient cash to fund your business properly to the stage where it can take care of itself or at least your business starts generating income from sales.
Cash resources to start your business
- Your personal savings.
- Selling idle personal assets like your road bikes, your treadmill for cash
- Personal loans from family and friends,
- Borrowing on credit cards
- Use Payday loan
- Re-mortgage your own home
Ensure you keep up with the repayment terms of your credit cards companies, payday loan providers and your mortgage company to avoid default charge and excessive interests charges on your outstanding loan amount.
A late payment could also have an impact on your credit rating, and it stays on your rating record for 6 years. This is important if you intend to borrow money from banks or other financial institutions, such as buy a car under a hire purchase or buy a house using a mortgage.
Business plan
It is always a good idea to prepare a business plan for your business, it helps you to put things into perspectives. Additionally, it also allows you to prioritize your business expenditure and your business to-do list.
Your business plan shall include a cash flow forecast as it will help you think through how much money your business is needed. Concurrently, where you can get the monies and the cheapest funding options available.
For examples,
- Cost to register a limited company.
- Accountant’s fees for preparing yearly company accounts and confirmation statement.
- Business costs working from home compared to rent a workspace or an office.
