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Are you planning to start up a business this year 2018? You could probably be struggling with the thought of where to get capital to get you started. Here are some 8 possible options for you to evaluate and choose from. Be my guest and read on:
- Bootstrapping: If you are able to have some own capital for your business, the better for you! This will mean that you will avoid having financiers who might end up having a disproportionate slice of your empire’s wealth.
- Family and Friends: The beauty about family, especially if you come from a close-knight one, is that they can lend you without seeking to pin you down against some unrealistic collateral. And that’s the beauty about it!
- Suppliers: If you can get suppliers who can accept to invoice you after you have done trading, then you might slowly move to a position where your cash flows are good enough for business.
- Advance Payments:Depending on the type of business that you are engaged in, you can seek advance payments from customers. This will certainly be pivoted against the level of trust that your customers have in you and your services. If you opt for this route though, you better fulfill your end of the bargain and even so, firmly keep in mind that whatever cash flow that is available before you fulfill your part of the bargain has just been loaned to you.
- Sacco Loans: Most of the Sacco loans have a flat interest rate, which can be awesome for someone who is starting up.
- Investment Clubs: You can also opt to joint an investment club, which is typically a group of people who decide to pool their resources to make an investment(s). These are organized partnerships they can opt to buy or sell based on majority say. Your start-up could spring forth from here.
- Bank loans: A Bank is like a debt financing supermarket. You just pop in and seek short-term, mid-term or long-term financing. A bank will finance any of your asset needs. This includes working capital, equipment as well as and real estate. A bank loan assumes that you will generate enough cash flow to cover the interest payments – which are tax deductible – and return the principal. The bank will want assurance of repayment by requiring personal guarantees and even a secured interest on personal assets. Unlike other financing relationships, banks offer some flexibility. You can opt to pay off your loan early and terminate the agreement.
- Angel equity: An angel investor finances your startup by providing capital in exchange for convertible debt or ownership equity. Compared with other lenders, their terms are more favorable.
George Wachiuri is an Entrepreneur, a Philanthropist, a Motivational Speaker and the CEO, Optiven Group. To get more details on how you can invest with Optiven Ltd. Kindly talk to us via 0702 831 083, 0738 831083, Email; info@optiven.co.ke Website: http://www.optiven.co.ke
