How to raise start up finance

Starting a business is a very exciting time for budding entrepreneurs , but it can also be the most stressful. The following guide is a quick overview of how you could raise start-up cash for your business.

Own money
The first place to look when starting a business is your own bank account, though this can be a risky option. Capital tied up in property can be used via an equity release mortgage deal, though a redundancy package or pension windfall can also provide funds to invest in a venture.

Business Loan
Approaching a bank for business loan is a common route to funding a company start-up. Any lender will want to review a detailed business plan before imparting any funds and will expect collateral, in the form of either the firm's assets or a property. Securing a loan against the latter is risky.

Compare business loans

Grants
There are a plethora of local business grant schemes nationwide, geared to each industry sector and project scale. For a helpful list, check out Business Link.

Bear in mind that grants will typically apply to a specific project rather than general business costs. The Prince's Trust provides loans to unemployed 18 to 30-year-olds with bright business plans. The trust offers up to £4,000 for sole traders, or £5,000 for a partnership.

Buying an existing business
Sometimes buying an established business can prove to be a shrewd move. Opting for a business which has revenue coming through it might be a good step to owning a business. Banks however will usually only fund the cost of the property, so if the purchase price of the business is £200k with £170k of that being for the property. The bank will only fund the £170k for the property you will have to find another source of finance for the remaining £30k. Have a look at businesses for sale at the moment.