Are you a businessman, and do you have some aspirations? That’s fabulous. Is that one of your aspirations to develop your firm? Please remember that you need to ensure the investment plan strategically about financing the development. Additional material, industrial space require an investment.
How Is It Possible To Finance A Business Investment Plan?
Your market research looks good, but your business plan shows a need for more funding than the capital you have?
We have prepared this guide to help you understand the different alternatives available to you to finance your business.
Schematically, you can approach 4 types of factor to obtain investment for your business:
- Investors inequities
- Banking and credit institutions
- Crowdfunding Platform
- Public authorities
Investors Inequities
Equity investors will take part in your business to make a profit in a few years. This type of investment plan is possible if you have a company, not a self-employed person, or a sole owner.
The call for equity investors has three major advantages.
- You do not have an obligation to repay the funds. Your investors will hope that they can make a strong return on their investment by collecting dividends or making a capital gain on the resale of their securities, but if things don’t go as planned, you won’t have to repay anything.
- The capital contributions made by investors will strengthen the company’s equity, which will give you greater credibility via banks and your business partners.
- In addition to their money, their expertise, and their address book, investors can also bring you.
Search for equity investment from different types of investors.
- You can first approach your associates to intend them, in addition to their contribution to the starting capital of the company, and then they pay money to the company on the current account of the associates.
- finally approach professional investors: specialized funds depending on the sector and the level of progress of your project.
Banking And Credit Institutions
You can call on banks and specialized credit institutions to finance part of the assets of the company.
Simply put, you need three things to make your plan bankable:
- Show that your project is credible: The existence of a market, a management team that knows the sector, etc.
- Assets to finance: banks only give to small businesses based on historical assets or cash flows.
- An equity contribution that allows for a fair distribution of financial risks between the bank and the project leaders.
The main advantage of bank financing is that its costs are relatively low compared to equity.
There are a large number of specialized products at your disposal: from overdraft to borrowing, including leasing. The presentation of the operation and the cost of these products were grouped in the following:
- Investment financing
- Financing of the operating cycle
Crowdfunding Platform
Crowdfunding platforms enable you to collect donations, loans, or investment plan from a large group of people.
Public Authorities
Public bodies are the last type of actors from whom you can apply for financial assistance to finance your business plan.
Here, we hope this guide gives you a successful investment plan that has been useful to you.