Four Main Capital Resources for Start-Up Entrepreneurs

3 mins read

Digital age is encouraging young millennial generation to be an entrepreneur instead of working in a 8-4 job instead of being an employee in a company. The widespread internet accesses in the world open has opened millions opportunities for everyone who want to open their own businesses.

However, opening a business is not as easy as turning your palm. As increasing business participants, you’ll have to be mentally prepared to face various business challenges. However, the main thing usually underlie a business beside your decision about your business concept and market segment, is capital.

Once your concept is clear, you should begin to think about the needs of venture capital. You can start from what you have right now. Here are some types of capital resources that you can consider for your business pioneering :

1.Own Capital

The biggest advantage of using your own capital is that you’re not tied to any party in developing the business. Nobody would interfere or veto your ideas and decisions, so you can freely explore and develop your own business without having any obligations to make a progress report to other parties. sides, you don’t have to share and deposit you profit to other accounts.

2.Capital of Relatives

You can take advantage of your networks as you can get soft loan without interest to increase your capital. It’s interesting as you can still have benefit like your own capital as the loans of relative of good friends doesn’t mean that they’re getting involved in your business.

However, this type of capital is usually limited as most people won’t lend money in large number without any collateral. The trick is that you simply borrow to more than one friend or family.

3. Joint Venture Capital

When you’re facing the lack of cash and difficulties to get any loan from your relatives, you can hold friends to join venturing the capital of your business. This makes your relatives or friends as shareholders. You should pay attention to the distribution of rights and obligations to avoid potential conflicts as well as you’ll have to full open about your steps and progresses.

4. Bank Capital

This steps can be taken only if your recent business has been in development phase and running for at least one year. Bank will only finance the businesses that has been running shoe some promising development. However, some Bank is developing different policies. It’s very important to do an accurate calculation as you have to pay some interests from your loan.