With the world economy going for a big spin and the situation looking so bleak, that you have lost all hopes of a possible recovery, the current situation is also a breeding ground for many new enterprises. It is a simple irony that the current scenario which happens to be grim for many, may actually prove to be a boon for many others. Therefore if you are planning to set up your own business, then you do not need to lose heart.

If you intend to set up your own business then, apart from a brilliant idea and basic infrastructure, the requirement that you need to address is finance. Although you may be flooded with advertisements by a lot many lending institutions promising collateral free loans, what you need to remember is that everything comes with a price tag. This does not mean that you should do away with your entrepreneurial instincts. All you need to do is have a practical approach.

The market may flood you with a lot many funding options, but the option which suits you the best depends basically on various factors such as your product, your clientèle, your financial requirements as well as your own financial situation.

The following are some of the sources which can help you raise fund, if you are a new enterprise:

1.Your own savings and Investments
On any given day your own reserves would actually be the best source for your capital, mainly because, you do not need to pay any interest on it. And, if you also consider the opportunity costs, even then it would be safe to assume that this is the best option, because, otherwise, you would not consider having your own business, if there were better investment options.

2.Loan against collateral
Even if you have a collateral free loan knocking on your doorstep, it is often wise to go for loans against collateral. A simple reason for this is that collateral free loans are often accompanied by higher interest rates; and when you start up, you need to save as much as possible.

3.Venture Capitalists
You may also look forward to approaching a venture capitalist. Venture capitalists, quite often focus on new enterprises with great potential. So if you have a brilliant idea, then you have every chance of getting financial assistance from a venture capitalist.

4.Angel Investors
An angel investor may not be an angel in true sense, but could be quite helpful in achieving your firm’s financial needs. An angel investor is basically an individual who invests in start up ventures. In return, they often ask for a share of the ownership.

Apart from the above mentioned sources, you can also approach your friends and relatives. Credit cards can be another option, as well. But before you take the first step, my advice to you; set up your priories first.

Tags: brilliant idea to fund your new business, how to raise your fund, money making ideas

This entry was posted on Monday, November 24th, 2008 at 2:47 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.