Archive for September, 2011
Monday, September 12th, 2011
If you need funds to launch, beyond what you can supply, you have a number of routes to investigate. 1. Your own funds: first port of call, what can you invest yourself? Worth noting that if you seek other sources of funding expect to have to answer why haven’t you backed with more of your own money? 2. Friends and family loans: usually offered as straightforward loans (rather then equity stakes), unlikely to based on detailed financial analysis as they trust you and want you to do well, significant personal implications if something occurs and you can’t pay back. 3. Bank loans: hard to come by in these times of limited lending but not impossible. Will require a solid business plan with decent back-up of how a loan will be repaid, and what it will be used for. Benefit of being a loan to a limited company, saving some elements of personal risk.
Although a personal guarantee can be required. 4. Equity investors: your very own dragons. They will want to see a solid business plan, and will expect a slice of the business for the money they put in. They will generally also offer contacts, expertise and guidence where you need it (but not always – some will just be a straight cash injection). When you get an equity investor, you get someone with a legitimate say in your business – so choose carefully. Need extra help, get in touch we should be able to help you out. PS – Valuing your business when taking on equity partners is a whole other ballgame – how much for how much… confused, give us a call.