How to raise money for business?

The future expenses that will incur before the break-even point had to be included in the initial investment.

Nov 26, 2014 11:11 IST India Infoline News Service

Capital is always required if you are planning to start a business, and to manage it efficiently financial planning is a must at the start of the business. First of all, make an estimate of the initial capital to start a business. Apart from it, figure out the other expenditure that will follow in future. The future expenses that will incur before the break-even point had to be included in the initial investment. A business without money will thrash under the burden of its weight. So, let us check out some of the ways to raise money for business:
 
Government funding: You can always raise money by opting for government financing. Government funds various businesses through issuing typical loans for which you need to repay the principal amount along with interest.
 
Commercial loans: Business starters can opt for commercial loans that again are divided into two broad categories. The first one is long-term loans meant to buy fixed assets including land, machinery, buildings, property, vehicles and equipments. The second category is of short-term loan that covers revolving lines of credit. It is taken to cover day-to-day expenses like payroll and inventory.
 
Equity investment: It includes the funds given by individuals or other companies who want to invest in your business. They will have a stake in your company in exchange of this capital.
 
Venture Capital: Venture capital is not easy to obtain and also the business owner have to give up its equity in exchange of capital. However, it is suitable for a large business with high-financing needs. 
 
Crowd funding: It can be called as a social media form of fundraising. You can take small donations from the other people. However, it will require you to persuade thousands of people to raise required capital.
 
Personal savings: Prepare a list of all the personal savings that you have in your bank accounts. Investment of own savings comes with no interest or risk. Also, there is no additional burden to return the capital in a fixed time-period.

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