How To Raise Funds For Business

Raising FundsRaising funds for business is like nutrition to life. Whether raising funds for business is about starting a new one or growing or expanding the existing one, raising funds for business has always been a difficult thing. You can have best ideas; best people to accomplish that idea nut without raising funds for business, all of them are useless. Ways of raising funds for business may seem to be a difficult thing but as an entrepreneur you have many options. Raising funds for business is like bloodline of business and it works like a fuel to keep the business running. Raising funds for business also depends upon the type and nature of the business you have. But once you have realized the need of raising funds for business, here are some of the options from which you can choose.

  • Bank financing

One of the most common was through which people can raise funds for business is through bank loan or bank financing. Your banker may request you for guaranteeing your loan by small business association before you put it for approval. SBA is such an agency which is governed by the government and they will guarantee you to allocate the 80% of the value of the loan approved if all the criteria are fulfilled. If this is not an option for you then you can offer security in some other form like putting your home as security for getting your loan approved and raising funds for business.

  • Second mortgage

Second mortgages are also known as the home equity lines of credit. This type of fund raising might not allow you to have full amount of loan as some of the amount might have got locked up in your first mortgage. For knowing how much amount you can borrow on second mortgage, take the total amount of your home and then deduct the outstanding amount of your first mortgage and the remaining is the one which you can take in your second mortgage and through which you can raise funds for business. Be aware as there are some of the lenders who will lend only 70 to 80 % of the fair market value of your home. You are availed with an advantage in opting for second mortgage as a source of raising funds for business as the interest rate tends to be lower as compared with other source of financing.

  • Business partner

You might have a bright idea to start up a business but you might not have the bright funds to start a business where as on a contrary there are people who have the adequate money but non idea to put their money into. Thus you can make such a person your partner and raise funds for business. However before making any person your partner make sure you have aligned goals for business as he is going to be your partner and he would be having equal right in your business. For safer side also have an agreement as to the terms and conditions and also in the situation of break down.

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