HOW TO RAISE CAPITAL FOR START UP

Hello Everyone,
Welcome to my blog today as this article will focus in means to raise capital for business start up.

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Going into a business, an entrepreneur needs one major thing to commence a business which is capital for without this ideas or plan would just be on paper alone.

WHAT IS CAPITAL?

Capital is the amount of resources set aside to start up or invest in a business this includes liquid, fixed and current asset.

Capital is much needed to foster a business as all other factor lays on it as it is the foundation of starting a business.

How to raise capital for business start up

1. PERSONAL SAVINGS: This is mostly at times, the major source of capital. One dont just wake up one morning and start up a business.
   Business is what have been nutured and plan before setting to commence.
   During the period of planning, one can save to start up a business by disciplining him/herself of incurring unwarranted expenses.

2. CONVERTING ASSET: In accounting terms capital consist of both asset and liabilities.
   Cash is not only the source of capital, if your personal car, land or equipment which was not bought for the purpose of the business initially but is converted for the business use, it therefore forms part of the capital.
   Also assets like stocks, shares, bonds, current asset e.t.c

3. FAMILY AND FRIENDS: There are friends and family who are willing to support one in giving resources to raise capital. We can source funds from friends and family.

4. VENTURE INTO BLOCKCHAIN: Venture and invest in the blockchain . This is one of the ways one can actually raise capital overtime. As blockchain are sure source of income if one understands the system, hardworking and endures the learning process overtime.

5. PHILANTHROPIST: There are wealthy individual in the society who are always willing to help raise fund if you can prove to them the worth and future of your intended business.

6. GOVERNMENT LOANS AND GRANTS: Government from time to time offers grants and loans to individual who have a good business plan. They sometimes give funds without the aim of collecting back and sometimes give loans with little or no interest rate.

7. BANK LOANS: One of the most popular way entrepreneurs raise funds as regards the funding of business. Bank are always open to give loans to individuals who meet their requirements and have the necessary collateral.

8. FINANCING HOUSE: This are financial institutions which helps entrepreneurs to establish a business with the agreement of receiving a certain percentage of the business profit for some number of years after which they hand over the business ownership fully to the owner.

CRITERIA IN GETTING LOANS

There are some requirements one needs to fufill in other to get loans from the government or banks which are:

• A business proposal (well detailed) which includes type of business, location, estimated number of staff, estimated funds required to start up.

• Details of managerial partners/ manager set up with their personal information.

• Duly filled loan application form.

• Stating clearly the significance of the business.

• Approach the business wants to take to start up and run the business.

• Assessment from expert.

• Innovations and key ideas to run business.

• The estimated rate of turn-over of the business in the nearest future.

PROBLEMS IN GETTING CAPITAL

• Poor geographical location

• Poor proposal set up

• Unfocused research plan

• Unrealistic goal set

• Funds not matching requirements

• Relevance of the business is not in business description.

• If the business owners have criminal records or bad names.

Note that capital is always pumped into the business to sustain it. So capital is not a one time issues but needs to be sustained so ensure the smooth running of the business.

Thanks for reading as i hope this article imparts us positively.