Did you know that most businesses are either funded by the owner’s savings or by the savings (or in kind contributions) of family and friends? If you are battling to raise finance, then a good alternative is to get your family and friends on board. They know you as a person and if you can convince them that your business idea is great, they are likely to help you.
The idea is to see whether you can reach your target if everyone contributes just a little. It is a good idea to formalise how you work with family and friends; this means creating a formal loan agreement that clearly states how the money will be used and the expected returns and deadlines. Don't forget that you will be expected to regularly update people on your progress against these plans.
Keep in mind that if you are going to ask friends and family to help finance your business, they will expect you to know how much of your own money you are willing to invest! You can do this by using your savings or your personal credit facilities.
Have you heard of Crowd Sourcing? It’s a business concept which creates space for many individuals to contribute to a particular project. Why not extend the concept and consider borrowing money or equipment from a number of sources. For example, your dad might lend you R50 000 in start-up cash. Your best friend might take out a small loan to buy that industrial freezer your restaurant needs, and you could take out a micro-loan to pay for your marketing materials.
The basic idea is to raise start-up finance from different sources. Here are some examples:
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.