For those people who want to start their own businesses, one of the hardest things to do is to get the capital that they need to do so. This is because most of the traditional sources of loans or funding are apprehensive in providing funds for start-up businesses. Given this, most of them opt to shelve their business idea until they get the money they need.
Some opt to sell equity, and some of them borrow the money from relatives and friends. However, people who want to go into business for themselves need not wait until they get the money from these sources because there is a good source of capital that they can tap into. All they need is a good idea and a strong business plan. This source is an angel investor.
Angel investors are either individuals or companies who put in money into startup businesses. However, their role in the business is not limited to being an investor because angel investors take an active role in the management of the business as a means of protecting their investment, which is why angel investors are usually businessmen themselves who are astute in handling businesses. You can also them by getting ideas from the best small business ideas when searching in Google.
There are three ways by which an angel investor can provide funds for a business. One of these is by providing money through a promissory note or a loan, which can be converted into an equity position in the company after the launching phase of the company. Usually, the investor would take about 15 to 30 percent equity in the company, which is enough to gain a set in the board.
The second way angel investors provide funds is through a cumulative convertible preferred stock option, wherein the investor defers the dividend payments he would receive from his stock, while he holds a seat on the board.
The third way is for an investor to get an equity position right away when they put in their investment. In this set-up, they have an option to bring in one or two of his associates to help in the management of the business.
One good source of money that aspiring entrepreneurs can tap is an angel investor, which can provide them with the capital they need to launch their business. The good news is that apart from being able to get the money they need from these investors, they can also gain a number of benefits from the managerial expertise of the investor.
Applying for a personal loan to be the capital money to the business you want to launch is
the ultimate solution for entrepreneurs like you. There is no assurance that your application
in a licensed moneylender or banks in the Philippines will accept or reject it. It depends
upon your credit score or if you have a thin good credit history.
Why do you need a guarantor?
If you are not open for a collateral loan and prefer to apply for a personal loan philippines, you need to
have a guarantor. Banks and even the moneylender will consider your application if you
have a guarantor, he serves as the insurer that in case you cannot settle your payment, they
will be responsible to do so on behalf of you, since they signed the agreement.
Who can be your guarantor?
An ideal age of getting a guarantor is between 18 to 75 years old that can afford to settle
the occurring monthly payments. You can ask a reliable friend with good financial status or
parents who have invested their money in multiple ways.
What are the things you should discuss with your guarantor?
As the borrower, choosing someone to be your guarantor, you should discuss the following
important details to him or her.
- Is he/she willing to pay the personal loan for you?
Both of you should have mutual trust as well as understanding. Mutual agreement off the
paper is essential since they have to pay your debt if in case you are unable to do so.
Ensure to your guarantor that you will settle the payments on time, you just need a
guarantor that will prove to the moneylender that you are a responsible borrower.
When the situation comes to worst due to unforeseen life obstacles, you must pay the
guarantor for the amount they have compromise towards your quick online cash loan.
- Can he/she accept the loan agreement?
After you choose someone to be your guarantor, you have to be sure that he/she accepts
and respects the agreement between you and the moneylender. If they do not wish to take
the call from the moneylender for verification, it’s wise, to be honest with you.
Take note that not all types of the loan require you to have a guarantor, only borrowers
requesting for a huge amount of money are required.
Are looking for funding for your new business venture? There are so many people who are thinking that they know better and carry on their dream but spend years wasting time on a business that will never succeed. However if business investors liked the idea but just didn’t think it was investable because of the return on their investment wouldn’t be worth their while, you should still keep looking for the funding and keep your business dream alive.
Funding a business is a very important part of a new business startup up. There are plenty of options open to you; you just need to know what to look for. Most people turn to their bank first and try to get a bank loan. Other businesses (Asia) who prefer instant cash loans than the longer process usually to get urgent funds from legit money lenders in Singapore.
Bank loans can appear attractive as you don’t have to sacrifice any ownership of the business however their interest rates can be high and you might spend a long time paying the debt off. Plus with a bank loan, you will have to pay it back even if the business fails.
Another option available to you is equity finance which is where you sell partial ownership in exchange for cash. This can be in the form of a business angel or a venture capitalist. With business angels, you get the added advantage of advice and support from your investor. Angel investors tend to be very successful in their own right and have similar businesses to you. They often save struggling businesses from ruin and set them back on the right track.
Venture capitalists investors are another type of debt financing. Sometimes these types of investors become partners within the business and use their skill and experience to turn the business around or help it off the ground.
Most of them take an active role but some simply provide the funds and let you run the business yourself. If the business succeeds they typically make a larger return on their investment than for instance interest rates on savings accounts. This is why venture capitalists’ look for businesses to invest their money in. Equity financing is far more expensive if your company is successful but far less if it fails.
Business grants are another option available to you and they could be just the type of funding you need. Grants are sums of money that are given to business and do not need to be paid back. However grants generally come with terms and conditions which must be met to ensure you don’t have to pay the grant back.
Most grants are given to limited companies, partnerships, and sole traders. Unfortunately, the location of your business will be crucial with regards to obtaining a grant.
Finding funding couldn’t be easier with the internet. There are lots of business angel companies which offer the chance to meet with investors. Some online sites have members’ areas where those looking for finance can post their business funding needs. Investors also can become members and look through all the investment opportunities and chose who and which company they wish to invest their money with.