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Types of Start-Up Funding Options For Entrepreneurs

Funding & Investors is a blog created to give the investors some information on various funding options available in the current market. The blog is written by Sanjay Ghemawood, a finance consultant based in Mumbai. In the blog he has listed various financial alternatives that an investor can choose from in order to raise money for a particular purpose. This is one of the easiest ways to source funds without involving any middlemen.

Funding  Investors

A number of options are presented for funding a business or organization. These include Seed Funding, Angel Investors, Corporate Loans, Commercial Mortgage Loans, Business Loans, Personal Loans and Receivables Funding. In this article I am going to discuss only Seed Funding. This is commonly provided to new start-ups for the purpose of launching their business and to enable them to manage their business as well. The funding can be used for any purpose that the company feel like using it for.

Seed Funding is basically a type of a private loan provided to the investors by the start-ups for the purpose of investing in their business. The common Seed Funding includes angel investors, venture capitalists as well as other private financial institutions. The main benefit that an individual investor gains out of the Seed Funding is that the start-up is not required to look for a large amount of capital as seed money.

Angel Investors are a group of businessmen who normally invest in a particular business idea in return for a stake of the profits. This is usually referred to as a private loan. An angel investor typically requires a great deal of trust from the start-up in order to trust him with large sums of money. They also require a guarantee that the business will generate profits. Businessmen who are looking for angel investors should keep their businesses in the development stage for at least two years.

Commercial mortgage loans are provided through financial institutions such as banks or the credit unions. This is a long term funding solution for any organization that requires large sums of capital. These loans are not easy to get and require applicants to have good credit ratings and a sound business plan. They also require applicants to apply with a fixed business plan as this is the determining factor for approval.

Private funding sources are generally a difficult process as they require more time to be processed & also require a lot of investment in terms of time, money & effort. The easiest source of funding for start-ups is usually a private friend, colleague or an acquaintance. However this is also the least preferred as most entrepreneurs do not like to be rejected due to lack of money. The final decision of where to seek start-up funding for your business can be made easy by using various online search engines. There are many commercial finance start-up companies that offer funding solutions that fit your criteria.