Unconventional Alternative to Raising Fund for a Business

March, 2019

Business and investment

Starting a new venture in itself is a huge task, to top it up with the burden of getting it financed can be an overwhelming experience. However, this process is inevitable and cannot be avoided by any new entrepreneur looking to foray into the market. The whole process becomes seamless if it is planned well. The planning should be sequential to avoid any challenges and delays. An apt business plan followed by robust financing strategy and sturdy operational procedures ensure a fruitful outcome.

Alternative of angel investors

If it’s a new endeavor, it definitely needs investment. An age-old way of finding such investment is angel investors. It is very common among start-ups to locate an angel investor to pump some finance in the venture to give it a desirable start. However, it is always not convenient and correct to start a business with the help of an angel investor. The overall business decisions might not be compatible with the investor, so it is always preferable to list down other alternatives that might be more convenient for investment in a new venture.

Already an entrepreneur

If one already owns a business successfully and is doing well in it, then in that case funding for another business becomes a cake walk. Any new business venture can easily be made operational under the umbrella of the existing business. That way, funding becomes easy since the fund can be loaned from one business to start another.

Financial institutions

There are several financial institutions who lend fund to new enterprises for kick starting their business. However, one must be careful and do a thorough market research and verification before borrowing money from any such financial institution. There are several organizations who do not hold a valid license to do such financial dealing. Only the organizations registered with FINRA can be reliable source. Depending on the credit history of an individual or entity, the financial institutions can lend out a loan amount required to set up the business.

Portfolio loans

Another alternative can be selling securities in the market and obtaining a considerable amount to start a new venture. Again, it is not advisable to sell the entire share and security for funding, rather a portion of the portfolio can be utilized to get a loan amount that can do the funding. In such circumstance, even if the interest rate on the loan amount is fluctuating, it will still prove worthwhile in the long run with the rising value of company share with time.

Retirement fund

Although it is time taking, still it is a reliable option for many people. The retirement fund or asset can definitely be used as a funding option, however a withdrawal of the retirement fund before sixty can imply paying applicable tax for the same. Based on individual requirement and preference one can choose from the options what is best suitable for the successful implementation of the business.

Framing an Effective And Compact Business Plan

– Kathakali Basu, 
Content Writer,
Infoholic Research