Startup’s are the new fad in the entrepreneurial world and UK currently has the distinction of being the second-largest startup base after the US. The startup ecosystem is much more robust here in comparison to other countries. As per the data released by Centre for Entrepreneurs (CFE’s), a record 650,000 new ventures have paved their way in the market in 2016 alone. Another government-backed campaign “Startup Britain” found that more than 342, 927 new businesses were registered with Companies House during the first half of 2016. That’s a whopping average of 80 new companies every hour of the day.
Now realistically, these figures are all good on paper but none of us know the true story behind any of these 650,000 ventures and how they came to be. The million dollar question that is omnipresent on every entrepreneur’s mind is:
“How do you go about funding your business?”
Now when this question finally dawns upon you, there really aren’t any clear answers unless you have a few thousand quids lying idly around in your basement. Jokes aside, this post will tell you about the 4 realistic ways to fund your small business. Mind you, the emphasis is on “realistic”. So here it goes:
1. Startup loans:
Don’t be surprised if the post doesn’t start with mentioning friends and family for funding your startup. As great an idea that may be, we are here to look for realistic mediums for funding your business. If you have a new venture, there is a government-funded program called “Startup loans” that lend to small businesses and new ventures. One can borrow up to £25,000 with a 6% interest rate. The only condition is that you have a business of your own running for no less than 24 months.
Crowdfunding is the next best thing available for any new business who doesn’t have the purported funds to support their venture. It has become an increasingly popular strategy for entrepreneurs to fund their business. What crowdfunding does is that it helps you pool money from different individuals through a common platform to contribute towards your venture. There are many websites that serve this noble cause like “Kickstarter”, “Crowdfunder”, “Crowdcube” that can help one crowdfund.
3. Angel investors
The term is more than apt for investors who help seed new ventures from their roots. This, however, doesn’t come easy. One needs to be thorough and precise with pitching their idea as it makes all the difference. If you can put up a tight pitch along with a measurable growth projection to investors, you are sold. The only thing to give up on this is a partial share of your business but that’s more than obvious.
4. Peer-to-peer loans
A recently new practice, peer-to-peer loans can help you finance your business minus the routine hassles. This system involves businesses lending money to other businesses and getting returns for the same. Some companies offering this medium of financing include Assetz Capital, Funding Circle, and Zopa. You can also take help of the discount codes from VoucherBin, where you can find various retailers which offer short term as well as long term business loans at a low-interest rate.
Funding your startup doesn’t come easy but it should also not be the stuff of nightmares for you. The startup landscape is ever growing and so should you. Good luck out there.