How to obtain financing for a business?

Many times, it is not easy to start a business from scratch. In financial terms, it can be complicated to get the funds to take the first step and boost the growth of an enterprise. Therefore, it is important to be aware of the different means through which financing for a business can be obtained.

Do you have an idea in mind but have not been able to carry it out due to a lack of economic resources? This type of situation can become a cause of demotivation for many start-up entrepreneurs. 

But with time and experience, you will learn that this is something that most businesses go through. The solution is to be clear about the needs and objectives of the company in the short, medium and long term. This, regardless of the type of project you want to build.

For example, if you need financing for a business to get started, you should find out about the possibilities available to you. Currently, there is a wide range of private and public sponsors interested in promoting innovative proposals.

There are many ways to access a grant for the business, either during the start-up phase or to invest in a transaction that will boost the profits of the business.

Today, Zen Valuations accompanies you to discover 3 of the main media that could become your best ally when looking for funding for start-ups or companies with a remarkable trajectory. 

Evaluate all the suggestions in detail and decide on the most appropriate for your particular business. We suggest that, in order to make any decision, you count on the advice of a professional in the area. Consulting services are always a good idea. 

Governmental corporate financing

In most countries and cities, it is possible to access a series of state benefits that make available to citizens some resources for financial assistance to companies.

In Canada, for example, there is a wide range of public subsidies. There are entrepreneurship programs, cultural and scientific calls for proposals, scholarships and other benefits provided at the provincial and national levels.

To be a good candidate for this type of financing for a business it is important to have a solid approach to the project and to be aware of the public calls and presentation dates. 

One advantage of these types of contributions is that they tend to support ideas in gestation and are designed for very specific audiences. You can always find different types of financing for a small business, for research, for innovation and technology development, and for the advancement of all types of industries. 

It is important to follow the indications and rules of the calls for proposals to the letter to avoid disqualification. In addition, it is essential to be creative and to show strategic planning when presenting your project. 

Do the necessary market research and present your ideas in an attractive way to add value to your business. Describe in detail all your ideas, organize a schedule of activities and make sure you have the best allies within your team.

Private corporate financing

At the level of private financing for a business, there are also several alternatives. One of the best known concepts is that of angel investors. These are people who are willing to make an economic contribution to emerging companies in exchange for remuneration, either monetary or through their participation as members of the project. 

There are also venture incubation programs. That is, organizations interested in sponsoring start-up business models. This is done through a wide range of resources ranging from advice to ensure the success of the project to business and administrative training courses and economic investments. 

To participate and have a better chance of receiving financial support, it is important to have an excellent Pitch Deck: a professional, concrete and effective presentation that makes your business stand out. This will help persuade investors to become your means of financing for a business. 

Loans

Although it may seem complicated and many people do not consider this option, ideally, financing for a business should begin by investing one's own resources or by asking for loans and investments from family and friends.

Of course, this is an alternative that will work for businesses that do not require a large budget and whose obligations can be easily covered with moderate capital. 

It is essential that, if this option is considered, it is always clear that interpersonal relationships should not be affected by business relationships. This is usually the reason why it is recommended not to initiate dealings with loved ones.

However, this will depend on each specific case. There are also many advantages to starting a business with the help of the people you trust the most.  

However, it is also possible to obtain the necessary documents and commit to meeting the basic requirements to obtain a bank loan and make this the preferred means of financing for a business.

Certainly, financial entities will review the credit history of the representative and the sustainability, projection and authenticity of the business.

Whichever type of financing for a business you decide on, it is important to learn more about how to be prepared for negotiations with potential investors and entities. 

We recommend you to read our article: Business plan Canada: getting financing or attracting investors.