Financing your Business Dreams

Raising Finance
For any new business the issue of where to find the money for a new venture should be at the forefront of any entrepreneur’s mind. Initial start-up costs, development expansion and furnishing costs are crucial for the success of the business. The capital is an important and essential part of establishing a new business, no matter how great your idea is.
The process of raising finance requires careful planning and good professional advice. It is important that a new entrepreneur understands the various sources of finance open to any new venture and knows which of these sources are appropriate in relation to the needs of the business. The most suitable form of funding for your business will depend on many factors such as the type of business you operate, its stage of development, your future plans and growth prospects.
Before you start this process you must have an adequate amount of capital to start with. So where can you get a loan from and what benefit you would get from this?

Common sources of finance: -
· Personal Sources: -such as personal savings, family support, borrow from friends/family
· Borrowing Money: -such as HSBC, Barclay’s, Lloyd’s TSB, etc
· Equity Finance: -such as mortgages and loans
· Grants: -From Central Government Grants to local Grants

It is important to do a comparative study of the costs of each possibility and also consider any tax implications before making a final decision about who to approach. Most lenders will require some form of security. No amount of security will make a bad plan good, but it does demonstrate commitment from your side and provide insurance for the lender.




Generally acceptable forms of security include: -
· Charge over a specific asset
· Fixed or floating charge on your business
· Second mortgage on your home
· Personal guarantees

By comparing and weighing up all the facts and information about the rate of interest and the length of return, you will be able to find out which one of these sources of finance is good for you and which would not be so suitable.

You should consider: -
Consider more than one form of security.
If the lender requires personal guarantees, proceed with great caution.
Try to ensure that guarantees are limited in amount. Also consider insuring the risk.
You will almost certainly be required to present a comprehensive and convincing business plan to show how you are going to service the loan. In essence, this must demonstrate that you will be able to meet the new commitment through sustained growth in your business.
The provider may also give you some professional advice, not only to help you but because they want a high rate of return in a shorter time. Giving advice could help them build a good partnership with you, make you more confident to do business with them, and furthermore wish to come back again.

Information about Routes of Finance: -These web-sites below will provide you with further information, details and steps into finding and setting up the right finance option for you and your business.
http://www.co-op-assist.co.uk/raisefin.htm#define
http://www.enterprise-ireland.com/Grow/Finance/RaisingFinance.htm
http://www.startups.co.uk/aF_Cg0c.html
http://www.anbusiness.com/business_advice/general_advice/raising_finance.shtml
http://www.bized.co.uk/educators/level2/finance/lesson/sources1.htm
http://www.ioe.ac.uk/TeachNetUK/dsalbstein/sources/index.htm

Guide to Raising Money: -
Treat negotiating for money with the same planning and thought as making a sale.
Make your presentation carefully.
Be very certain that you ask for the right amount of money because it is very difficult to go round a second time to ask for more.
It can be difficult to raise less than £1 million.
Overdrafts are for the shorter term: long-term finance is provided by loans or selling shares, if you have a company.
As a rule of thumb, you will need to invest as much as an outside investor or perhaps half as much. Rare exceptions have managed to put in a much smaller proportion than an outside investor and still retain control.
Securing loans on your house or giving personal guarantees is a major step. Do not take it lightly or without discussing it with your family.
Money can be raised from banks, private individuals and companies, venture capital funds, charities or local authorities.

Information about raising money: -
http://www.eurekahedge.com/news/04jan_archive_capital_raising_asian_hedge_funds.asp
http://www.associatedcontent.com/article/93721/guide_to_raising_money_with_informal.html