How to Fund a Small Business

Funding a small business that is in its initial stage is a tough call. This is because a business needs quite a handful of funds to keep operating. There are various options for an entrepreneur to fund his business. In this article, we are going to discuss how to get funding for your business through various ways.

Self-Funding

This option is the most obvious one out of all others. If you as an entrepreneur have got the resources beforehand, you don’t need to depend on external sources of funds. Many entrepreneurs and owners fund their ventures themselves. This is either done by savings or personal debt like credit cards. They can also sell their personal assets and belongings to generate cash. These assets could be a private property or any other personal holdings.

Cloud Funding

This type of funding requires the owner/entrepreneur to pitch in the ideas to the investors via the internet. If, for instance, this type of funding is deemed successful, there will be other multiple investors interested as well to contribute funds to your idea.

The only downside of this type of funding is to be aware of the restrictions on how cloud funding operates in your area.

Partners

Making someone a business partner can be a great source of finance too. It is not essential for a partner to become an employee of the business or the small venture. Partners can work together by aligning resources or agreeing on a ratio that could divide the profit earned between both of them. This can be done in many ways. For example, profit can be shared on the basis of the ratio of initial investment done by each of them. They are other ways to determine the profit sharing ratio as well. The only downside would be that the profit earned would have to be shared and conflicts can occur between the two partners as well if a proper agreement is not drafted initially.

Investment Companies

There are many companies that offer to invest in small businesses and start-up ventures. A good example of these investment companies is AKD Group and AKD Investments.

These companies support new ventures and pitch in funds for greater innovations to come into the marketplace.

Banks

Banks are a traditional way of borrowing loans. However, their paperwork is pretty hefty and banks require a lot of track records from the borrower. This is a stressful process that one would not prefer going through especially when there are other great funding options available around. Banks often want loans secured by assets which is a tough call. However, funding from banks can be secured with a good business plan and persistence.

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• AKD INVESTMENTS
• AKD GROUP