There are a range of different financing options for those people starting up a small business and these include:

• Your own money – if you have sufficient savings you may want to consider using these to help start up your business. Remember that you should leave something aside to live off in case the business is slow to start making a profit.
• Family or friends – you should always think very carefully before borrowing money from close friends or family, as you could have no way to repay them if your business fails, or takes a long time to become successful. You should also get a proper legal contract drawn up, to ensure that all parties have some security, and to clearly define the amount of money the loan is for, and how it is to be repaid.
• Banks – before you approach a bank for a loan make sure you have a well thought out, credible business plan in place. This will help your advisor select the best product for you, such as an account with an overdraft facility or business loans to help with the financing for any vehicles or equipment you need.
• Investors – some larger businesses can attract investors, especially if you have taken the time to work out a thorough business plan and projected profits and earnings.Make sure you get some advice on how to set up investment agreements properly, to protect all the parties involved.
• Grants – some businesses can qualify for a government or local business association grant to help with the costs of the initial set up.This is a great boost for some small businesses as grants are often offered on subsidized or 0% interest loans which are excellent ways of getting cheap finance, and some grants may even by straight cash gifts, which do not have to be repaid.The main disadvantages of grants are that they can have very restricted criteria’s for applicants, and they may not be enough to finance the whole of the business set up.Also there can be heavy competition for grants, and the application process can sometimes be long and involving.

So there are lots of options available for you. It’s just you have to decide which option to choose from. Sit back with your friends and relatives OR your financial advisor to come to a conclusion.

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