Financing a new business

All businesses require funding and this is no different to the new businesses in fact as they often have no running capital or cash flow to buy materials or pay for other necessities such as premises or staff – new starters can find it very difficult to generate funds and as such may come from a variety of sources other than traditional business revenue.

Sources of Finances for new businesses

1/ Savings of business owner
2/ Money from private investors/business partners
3/ Funds from Financial institutions such as banks
4/ Funds from Friends
5/ Government funds e.g. business grant
6/ Trade organization funds
7/ Private equity/Venture capital

Different forms of financing may require different information and security for example obtaining funding from friends or family may not require the production of a full business plan and profit and loss forecast – however for more formal funding from for example a bank will require the production of detailed information and in some circumstances some form of security.

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