Starting a new business can be a difficult affair and it can be fraught with many pitfalls. There are a few basic things you need to be aware of before you start. You need to have enough capital to get your company off the ground and sustain it for a long period of time.
You have to start analysing your business strategy and work out how much money the business will need. Then there are methods of financing your business. You have to choose an option whether it is through your own savings, help from family and friends, bank loans, loan Singapore, crowd funding etc. Then there are resources that certain businesses need. Ask yourself if you’re in possession of such resources and if not how you would go about acquiring it.
One way of financing your business is through equity investment. In this method, an investor offers up a certain amount of money in exchange for a share of ownership in your business. You have to reflect on how much of the ownership you are willing to transfer to another party and what price you will set on it. If you’re not in possession of more than 50% of the company shares, you will no longer be in control of your own company.
Self-financing is another option. You can start drawing money for your business from what you have saved up over the years, your inheritances, aid from family and friends. If you fund a larger portion of the business from your own money it shows that you are committed to your business and potential lenders will see it as a mark in your favour. If you have a large equity, you go up in esteem when it comes to lenders and banks allowing you to access outside funds easily.
Other options include government funding and commercial loans. Government funding is more focused towards some types of industries and it may not be easily accessible by all. They are available in the form of loans that you will have to pay off with interest. Commercial loans can be long term or short term. The long term loans will be for large expenses or assets that you are planning to use for a long time like buildings or vehicles while short term loans mostly last for a year and include daily expenses. You can obtain the services of a legal money lender in Singapore and you can acquire instant cash loans with reasonable interest rates and efficient service. Most lenders look for your capability in paying back the cash you borrowed by looking at the cash flow estimate in your business plan. Other requirements include the value of possessions you are prepared to offer as assurance, the amount of money you have allocated to the business by personal means, your history of paying off debts and current financial situation.
You will, therefore, need to impress the lenders on your level of responsibility by having a competent management and employees, consistency in the cash flow generated, business potential and ways of expansion in the future, collateral offered in assurance and being in possession of a solid credit rating. You have to weigh the advantages and disadvantages of the funding opportunities available to you in order to make a smart decision to secure financial stability for your business.