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How do I find start-up grants for my small business?

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QsId 12
Asked by Isaac Thuku
Category Personal Question
Title How do I find start-up grants for my small business?
 

Tags startup, investors, capital, grants, entrepreneur
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Tuwaze Mawazo
Are you an entrepreneur building a start up or an investor considering investing in a small business? Entrepreneurs are full of great and powerful ideas but starting up the new business requires a hefty amount of money. Furthermore, getting this cash needs hours of traipsing business plans from one investor to another hoping that one of them would be interested enough to finance the venture. When it comes to looking for financing, nothing beats a grant. However, finding and actually landing on of these grants is extremely difficult but you will never land a grant if you don’t try.

Remember, finding the capital for your small business is a game of endurance and persistence. You should work hard to overcome all the potential rejection if you want to succeed since this is just a deliberate play in order to ensure the grant applicant is serious. Below are tips to help you find a suitable start-up grant for your small business:

1. Soft loan

A soft loan is a special type of grant where the terms and conditions of repayment are more lenient than they would be under normal financial circumstances. There are thousands of organizations like Big Issue Invest that offer soft loans but the most notable are government-funded schemes which offer loans to start ups.

2. Equity finance

Here, a capital sum is injected into the business and the provider of the funds acquires some equity share of the enterprise. When the value of the firm grows, the stake can be returned. The Enterprise Investment Scheme helps companies raise finance by providing tax relief to investors who buy shares in your business.

3. Free or subsidized consultancy

Start-ups can often find themselves in a situation where they lack certain specialty skills and there are some specially run schemes which provide this knowledge. For instance, the Welsh government runs a business support service offering free and independent advice on starting business. Here, you can gain access to valuable knowledge on how and where exactly to find start-up capital.

4. Personal savings

Most entrepreneurs start their business by investing their own savings. This source of financing is ideal since you don’t have to justify yourself to investors and you wont pay interest on it.

5. Small business administration

The SBA has a special program that offers microloans to small business owners. Furthermore, the loans come with business training which can be very useful for start-up entrepreneurs. They also work in association with banks to provide customized loans.

6. Leasing

Small businesses in certain industries need equipment to get started. One way to finance the business is to lease the equipment through a finance company and use it to generate revenue until a point where the business can afford to procure its own equipment.

7. Factoring

Factoring allows you access to finance for slow-paying invoices, which provides your business with immediate working capital. Factoring helps you to finance your business by leveraging the commercial credit of your clients Other sources for start up financing that are available to entreprenuers could be:

- The bank

- Venture capitalists and angel investors

- Government or direct grants

- Customers and suppliers

- Family members and friends

- Peer-to-peer lenders.

2016-02-05

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