14.09.2009 20:57:46

Investors Network Team

Finding business finance for your business can be straight forward if you know your way around the business finance landscape. You have come up with a great business idea, have done your market research and feasibility study, you have a great business plan and you may even have already put together a management team to get your idea of the ground. Its time to find finance for your, currently small, business.

Finding finance for a new business really can be a mine field. Yes there may be plenty of sources of finance, even you might not be aware of it yet, but the trick really is to find the finance that is right for you and your business.

Most businesses will start at the bank. This process will normally be easier if you already have a list of clients willing to buy, or who have bought your product or service. High street banks will be e very weary of financing equity,  but if you need a certain amount of trade finance, they will see you through. Or it may be that you have certain assets that the bank may lend against.

If a bank is not an option what next?

It depends how much money you are looking to raise. If it is over R1m, there are a number of financial institutions which may be able to help. Typically, they will not invest amounts of less than R1/2m because the amount of work they will have to do to make the investment makes it uneconomical. If it costs them R100,000 to make the investment and R20,000 a year to monitor the investment at the end of five years the investment has cost them the amount invested plus R200,000. A R100,000 investment will therefore need to treble just to break even for them!

business angels | finance for a new business | small business finance