Given these restrictions we will also discuss alternative ways of raising finance in your personal capacity. The amount of finance required for the purchase will dictate whether this is a viable option.
Sometimes it is difficult to raise business finance and so you might be considering raising the finance in your personal capacity instead. It is recommended to keep business finances separate from personal finance in order to protect your personal assets. However, this is not always the most practical advice for business owners who are in the early years of building their business.
The majority of businesses begin by using a portion of an owner’s personal savings. This means that nearly every business owner's assets are exposed to their business anyway – often because lenders insist that owners sign personal surety for business finance. The important thing is to record the money in the business accounts as either equity or owner’s loan account. Be sure to read the module of Understanding Personal Surety before you sign personal surety agreements.
If your business is turning over more than R200 000 per month and your equipment spend is greater than R50 000, then definitely consider asset finance as an option. Further on we’ll discuss the types of equipment and machinery that asset finance can fund.
If the cost of the equipment is not too high you can consider using an overdraft, credit card or seeing whether there is a Government fund that applies to your specific need:
We’ll explore all these options in this module.
Finfind provides its services free of charge to businesses seeking finance. Our primary purpose is to link SMEs with all the relevant finance providers and finance products that match their funding needs. As a matching service we are not required to be a registered finance provider as we do not loan money directly.