Getting funding for a project is probably the biggest challenge that most entrepreneurs face. In fact, almost 50% of new companies do not exceed five years. There could be many reasons for this, but the most important one is the lack of funds. Thus, the initial question in the mind of every entrepreneur is where to find the funds to carry out their project without problems. Before you even start looking for types of financing, consider two things:
1. It begins by identifying whether financing is even necessary at the current stage. Many entrepreneurs rush to obtain certain funds when the project may not have the infrastructure to handle a large number of sudden funds. Determining if and how much financing is needed can save you headaches and protect your finances.
2. Choose the correct font. Venture capital is one of the first objectives that certain entrepreneurs look for, but it may not be the best option for your specific business. Entrepreneurs should be focused on networking and attending events to talk to entrepreneurs from similar industries and see how they financed their companies. Each business is unique, so do a thorough initial investigation of all available financing options to find the best option.
Fortunately, there are several ways of financing, the challenge is to select the right path. Let’s see some options to consider:
Receive funding: government grants
Governments are very helpful when it comes to financing a business. From creating energy-efficient startups to disruptive supply chain management solutions, there are hundreds of potential grant schemes a company could apply for. However, achieving the ultimate goal of receiving a grant is not an easy task. To get started, you need to know what grant you can apply for Dual Business License.
Of course, to receive these grants there are certain specific requirements that you must meet. To do this make sure you have all the points covered:
· Gather as much information as possible. Contact the granting institution, as well as others who have already gone through the process to obtain that particular grant or one similar to the one you are applying for. The more people you talk to, the more knowledge you will have about what to expect or how to prepare to receive the grant.
· Make sure your business plan is bulletproof. Not only for a particular grant but for any type of fundraising you are going to do, you must write a business plan so that you can demonstrate to the people interested in investing that you understand the needs of your project.
· Have a plan for after you receive the grant. Rest assured they will ask you: How are you going to use the money? In both your business plan and the grant application, is it clear in which area of business expansion you are going to use the money? Make sure you have clear use of money: hire more developers, buy new equipment to increase production, etc. Try calculating some numbers and get ready to show how your grant expenses will increase the numbers for your business.
Apply for loans for start-ups
They are loans of up to € 50,000 offered by foundations and social works of some banks to promote entrepreneurship. They tend to have very competitive conditions: low interest, not having to provide guarantees, relatively quick concession.
Bank loans for new companies
With these, higher amounts can be obtained, even so, the concession will be conditioned to the risk criteria of each bank, so we will not obtain them if we do not have a guarantor or sufficient equity.
These are granted through crowdlending platforms that put companies in need of liquidity in contact with investors willing to lend them that amount in exchange for a certain return. The credit conditions are established by the platform itself based on the risk level of the project.
Launching a project is an exciting time. However, it can be extremely overwhelming, especially when financing becomes a top priority. Ultimately, do not rush to get financing without thinking about it. You must be strategic about when and how you get it and, above all, from what source.