Published on : 01 June 20202 min reading time
The creation of a business is a delicate project that deserves special attention. The marketing study and all the administrative steps seem to be perfect but you lack the budget to launch your own business? Financing is one of the driving forces to move a project forward, especially when you have little capital at the beginning. It could also be that the company, once established, needs financial assistance to develop its market or to multiply its product. Find out below about possible ways to finance the creation of a business.
Call on equity investors
This type of investment is specifically for a company and not for a sole proprietorship or self-entrepreneur. Fund investors proceed by taking a stake in your business with the goal of making a profit in a few years. There are many advantages if you choose this type of investment. In partnership with fund investors, you are not obliged to make a repayment. In fact, these investors expect a high return on their investment. The capital contributions from your investors will strengthen your company, giving you unfailing credibility with the banks or your partnerships. But the downside with fund investors is that you have to cede some control of your company to the investors.
Bank loans an alternative to finance your business
Bank loans are also an interesting possibility to finance the creation of new businesses. However, first and foremost, your project must be bankable. For this, you must demonstrate the credibility of your project as well as the presentation of the assets to be financed. The advantage of bank loans is that their cost is low in relation to equity capital. The only disadvantage with this type of financing is that you will have to comply with interest payment schedules as well as repayment schedules.
Crowfunding platforms are possible
Crowfunding is one of the solutions favoured by entrepreneurs in order to carry out an initial fund-raising campaign and thus launch their project. Crowfunding platforms allow you to collect donations, loans or investments from a variety of groups of people. With this kind of funding, you will have to find millions of people who can give you 1 euro per person. This type of financing is more and more popular nowadays and is seen as a better way to raise funds for business.