Getting business finance
Starting a business can be expensive, but what if you don’t have the cash? What sorts of business finance are available? And how do you get access to them?
Your business funding options
Not all businesses can get every type of finance. For starters, you can’t sell a stake in your business if you’re a sole trader or a partnership. And you can’t issue share documents unless you’re a corporation. The idea at the core of your business will also affect your business funding options. For example, traditional lenders like banks don’t really go for outside-the-box ideas.
There are lots of business funding options, but they fall into two broad categories:
Where you borrow money and pay it back, generally with interest.
Where you get cash by selling a part of your business to an investor.
Presales are a third way to raise funds. In that scenario, customers pay before you've created the products or services they're buying. Debt and equity are far more common, however. Businesses that have access to both tend to prefer debt.