You have an idea, a detailed business plan, but don't know where to get a start-up loan, from what sources? This article is for you!
The wave of startups in Vietnam has emerged in an exciting way in recent years. The startup community is constantly welcoming newcomers with new and innovative solutions. However, the constant volatility of the market and difficulties in capital has caused many startups to quickly leave the game. Cash flow is the lifeblood of a business, but where is the easiest and most beneficial place to get a start-up loan ?
When embarking on a business path, the first concern that makes start-ups a headache is capital. Where to find capital and how to use it effectively are questions that are not easy to answer, especially when the level of competition between businesses is increasingly fierce.
You have a business idea that is expected to "storm" the market, but just having an idea is not enough. You need many things such as website, sales staff, technical staff, offices, ... and most importantly, enough funds to operate and develop. Here are the notes and suggestions for you to find the right investor to start your business.
The first thing that Cashberry advises you before getting a business loan is to build yourself a specific plan. The plan here is your business plan and details the loan process. And what you need to do:
● Calculate your initial costs and consider how much capital you have on hand.
● Add interest to your monthly expenses.
● The monthly interest payable is something to keep in mind.
● Estimate how long it will take to pay off the capital: you can pay monthly or outright, depending on business revenue and the agreement between you and the creditor. The advice is to pay as quickly as possible.
If you can't develop a detailed plan, your business will be extremely difficult and you will have to pay a huge amount of money for what is known as interest on a startup loan .
The business is not always smooth sailing, so never think, having revenue can pay off debt immediately.
There will be a period of time when your business is stalled, you have to pay a lot of things every month, plus the debt from the initial loan, all of which will create heavy pressure.
Therefore, always try to pay off the debt as quickly as possible so that you can stay in business. Make a reasonable calculation with possible risks so that you don't fall into a pile of debt.
Start-up loans directly determine your monthly revenue as well as your business results for a certain period of time. Therefore, before taking out a loan, you need to carefully study the following contents of Cashberry:
● Current loan channels.
● The specific interest rate of each location you are considering.
● Notes to avoid being scammed at many loan channels.
● Correct understanding of interest rates: how long is the preferential period, how will the interest rate after the preferential period be calculated, interest rate adjustment periods, etc.
After having a reasonable business plan, it's time to find the answer to the question " Where to borrow money to start a business ?".
You can invest in your business using savings accounts, personal consumption or mortgage assets to get the necessary financing.
In many cases, using your own money instead of borrowing or calling for investment is a good development. Because, you will not have to worry about monthly debt collection bills or arising loans.
And the fact is, there are many business owners who continue this "self-funding" source of finance until the business is prosperous and profitable.
However, this approach is only really suitable for small business models, the market is not volatile. In the event that the business grows "hot", your own financial resources cannot meet, you will not be able to continue to spend money out of your own pocket, but you will need to find investors.
Family and friends are close friends, so it's easy for them to invest in you. However, these "investors" are not as simple as you think, even if you are not careful, you may encounter awkward situations later on.
So think twice before raising money from family or friends. If your business is going well then there is nothing to say, but you can also take risks. The best way is that before receiving money from family, friends or any investor, you also need to clearly state the business direction as well as possible risks.
One of the typical sources of funding, besides family and friends, is from banks. Currently, many lenders started out with incentive programs, loan collateral or unsecured , in accordance with the needs of each audience.
To be able to convince and get a loan, you need to research and make a detailed business plan, which should focus on financial planning with transparent information about cash flow, layout and use of resources. capital and the route to recover and regenerate capital flows.
With complete information, you can convince the bank. However, when applying for an unsecured start-up loan at a bank, you need to pay attention to the loan interest rate.
If you haven't been able to convince your bank to lend you a start-up capital, look to your credit card as a short-term funding solution . If you have an online business, the scale is not large, borrowing money from a credit card promises to be the right solution.
Compared to loans from banks, credit cards have an outstanding advantage of lower monthly interest payments.
However, this is also a limitation of borrowing money from credit cards. The short interest payment period makes it difficult to pay and maintain the card when the business is just getting started. Therefore, you need to consider the amount of loan from a credit card.
For students who are passionate about business, startup and capital raising competitions have become an indispensable playground. If you are not a student, there are many other startup competitions for you to try.
For example, the Startup program co-organized by VCCI and the Business Forum newspaper, over the years, has won the trust of many entrepreneurs and entrepreneurs by becoming a professional playground for new ideas.
If you win, you will have a large financial investment. What if it fails?
It doesn't matter, with the sharing and advice from successful entrepreneurs and experienced managers, you will collect many valuable lessons for yourself. Moreover, if your business idea has potential, you can completely have the opportunity to be invested by other units outside the competition.
You may not have the financial resources to start a business, but you know and get to know a number of individuals who can absolutely help you do it. According to the top 500 businesses surveyed by Inc, up to 28% of them raise capital from co-founders.
It is very difficult to start a business alone and be as successful as Jeff Bezos with Amazon or Michael Dell with Dell. Instead, big businesses like Google or Microsoft are successful thanks to the cooperation of Larry Page and Sergey Brin, Bill Gates and Paul Allen.
When choosing partners for your business, you need to make sure that these people share the same goals, vision and passions as you. Only then, both can set goals together and find direction to steer the business ship.
Just like in the case of raising capital from family and friends, you need to discuss it carefully with the partner to avoid affecting the relationship of both parties when financial problems arise.
Angel investors are wealthy individuals, elite economic entrepreneurs who have the ability to finance a new business. In return, they will have partial ownership of the company or seek a return on investment. These investors often use their own money, and they tend to invest in small and medium-sized businesses.
Angel investors are currently not many in Vietnam. Hatch Angel is one of the new network of angel investors but has attracted a lot of attention from startup individuals in recent years.
Members of the network are outstanding individuals and are interested in investing in new businesses. So if start-ups want to "hunt" for investment capital, they need to actively learn and quickly seize opportunities.
One thing to note is that before applying for financial support from investors, start-up entrepreneurs need to have extensive knowledge of the investment process, decide on the most potential investors, and then go to negotiate.
On the contrary, on the part of investors, they will decide whether to pour capital or not based on criteria such as people, time and products. In addition, the use of capital of start-ups is also paid attention to.
In contrast to angel investing, venture capitalists do not use their own money but raise money or call on others to contribute to establish a larger and professionally managed investment fund.
The activity of the venture capital market is still very hot and shows no signs of cooling down. Cash flow never seems to be lacking, but it is important how the business performs in projects for investors to care about.
The disbursement of venture capital funds (VC - Ventures Capital) will also depend on risk tolerance and operating model, but the common point is that the investments must be profitable and liquid. high.
Just like angel investing, you should also take the time to research the portfolios of VCs, after understanding each fund and each partner you can specifically target and decide which partner you want to invest in. want to negotiate.
Business is not a simple thing, to go to success you have to go through many stages, each stage has different difficulties and challenges. In particular, finding and borrowing start-up capital is the first step for the arduous journey ahead. Hopefully, the above article will partly help you to lay the first bricks on the path of starting a business.