Start-up capital is the greatest challenge for many entrepreneurs. Many people do not have an idea of what their financing options are. It is important to know that there are many institutions that are willing to help you actualize your dreams.Weigh your start-up financing capital to ensure you settle on the option that is best for you. Consulting experts on the matter may be necessary especially if you have little experience of the business world.
1. Bank and cooperative Loans
Bank loans have for a long time been the saving grace for many entrepreneurs. There are different types of loans that banks advance to their clients. Many banks have lowered their lending rates to attract customers. Banks with flexible repayment terms are your best option. Cooperatives and Sacco offer low lending rates compared to banks. Their repayment terms are also flexible.
2. Saving: Manage Your Income
You can also finance your business out of your own personal saving. This is especially if you are starting a small business. Using saving to finance your business is a good option because you will not be indebted to anybody. This way, it is easier to recover the money you have invested in business within a shorter period.
3. Borrow from friends and family
You friends and family can also contribute capital to start up your business. You must approach them with a business plan and convince them that the business is going to be a success. If you give them an assurance, they will be willing to support you. The advantage of borrowing from family is that, their lending rates are much lower compared to those charged by banks.
Government has come out strongly in support of entrepreneurship. They are offering grants to investors in certain vital sectors of the economy. If you want a grant, you must send a proposal showing how your idea will transform the society.