| Starting your own business is exciting and challenging. | | | | investor accepting a higher risk with a potential for |
| Unless you have a large personal savings, or are | | | | higher yield. |
| independently wealthy, chances are you will need to | | | | Another form of business funding is tax credits |
| secure funding for your business. There are several | | | | granted by the government that act as an incentive |
| options for you ranging from business loans, venture | | | | to companies to stimulate economic growth in |
| capital, government grants, tax credits, to personal | | | | various industries. These include businesses that focus |
| credit cards. We'll look at each of these in greater | | | | on energy efficiency, research and development, and |
| detail to assist you in determining the best source of | | | | agriculture. |
| funding for your business. | | | | If used wisely, personal credit cards can be used to |
| Depending on the nature of your business you might | | | | fund your business. The drawback to using this type |
| consider a grant. A grant is usually partial funding for | | | | of funding is if you are not able to manage your debt |
| a business that you will only need to pay a portion or | | | | it will affect your credit rating. Should you decide to |
| none back to the lender. Grants are provided to | | | | use your credit card, it is recommended they are |
| individuals and businesses by the government, | | | | used for non-essential business items, not for |
| regional development agencies, the European Union, | | | | operating expenses or major purchases like a car or |
| business link, chambers of commerce, universities and | | | | equipment and they are paid off each month. |
| even charities. Certain industries or locations that are | | | | Business loans are one the most common forms of |
| in need of revitalization, businesses that focus on | | | | funding for start up capital, to help expand your |
| research and development, inventors, farming, and | | | | existing business, or perhaps to refinance debt. The |
| others are all eligible for grants. Typically there are | | | | type of business loan to apply for depends on what |
| terms to the grant that you must adhere to in order | | | | your needs are. Small businesses can seek funding |
| to keep the funding and/or not repay the money. | | | | with a small business loan and many are available for |
| Venture capital is another common form of business | | | | specific industries. Although not all small businesses will |
| funding. This type of funding is done by companies, | | | | be turned away by banks, most banks favour larger |
| trusts, or individuals, also called 'Angel Investors', that | | | | or well-established businesses. If you are a small |
| provide money, start up capital, or loans to | | | | business or a start up, you will need to have |
| businesses as investments. Often its is given to | | | | excellent documentation, a business plan, and perhaps |
| existing companies that are doing well that seek to | | | | collateral (such as home equity) to secure a loan |
| expand and have a clear business plan with a long | | | | from a bank. Business loans are also available for small |
| term growth potential for both the business and the | | | | amounts, called "micro" loans for economic |
| investor. Often times the venture capital trust or firm | | | | development for a certain geographic areas and for |
| will buy out 25-55% of the business. "Seed money" is | | | | specific industries. |
| also provided by venture capitalists, usually with the | | | | |