Let’s look at all the options.
1. A bank can give money for business development – in Western countries it is perhaps the most important source for starting a business.
The advantages of this method:
– the procedure is usually worked out;
– You can attract significant funds.
– the need for collateral (the bank will not give money for a piece of paper in the form of a business plan, you have to lay an apartment or a car, perhaps both).
– high interest rates (often simply extortionate);
– it is generally quite difficult to get if there is no already established and well-functioning business;
(By the way, an option: take a consumer loan and use it on a business, interest rates are lower).
2. Money of relatives and friends. Everything is clear, so just mention. Although, there is another possibility: to find an intelligent acquaintance with some capital, to offer him to invest for a share in the business. You will get a partner and money – together it is easier, but there will be enough profit. You can search for such a partner through ads.
3. Money from private investors (money lenders, to put it simply). Huge interest is paid, but money is usually given without problems. However, I immediately warn you – often such loans are on the verge of crime.
4. State support. The state (oddly enough) has recently begun to support small business. In many regions, a novice entrepreneur can get 300-400 thousand rubles for the development of a business – naturally, with a good business plan. Also, the state (business incubators) can help premises with preferential rent, office equipment and so on.
5. Search for real investors (not moneylenders) who are willing to invest in a business for a fraction of future profits (similar to paragraph 2, only without partnership). Investors are such big people with big, tight wallets who are willing to take a little risk to make capital. If your idea is new and profitable, then many people will be ready to grow such a chicken for the sake of golden eggs.
Here are five ways to find money for business.Maybe I missed something, so add.