There are lots of different financing options and routes available for startups and small businesses. The options on the table will differ from business to business, but here are the general options available for companies looking to boost their finances and supercharge growth.

The main funding options include:

1. Personal savings

A common method of providing seed capital for new businesses is investing your personal savings in order to get the company off the ground. Family and friends often provide additional support in the early stages of a company, when getting funding can be at its most difficult.

2. Loans

There are various loan options for small or expanding businesses; here is a brief overview of what’s available. The two main categories of loans are secured and unsecured loans.

Secured loans use the company assets as security (for example a car or property, based on the amount borrowed), which can be repossessed if you’re unable to repay your loan. This provides more security for the lenders so interest rates are often lower. Unfortunately, many startups do not have the necessary assets in order to obtain this kind of loan. Alternatively, unsecured loans do not require a form of security but may require a personal guarantee based on your credit rating rather than collateral, which can be a lot higher risk for you should your business venture not succeed (i.e. credit cards).

Within these loan categories you can acquire term loans where you borrow a fixed amount of money at a certain interest rate over an agreed time period. Short-term loans are similar, but with a much shorter time period and often a higher interest rate.

3. Venture Capital

You can pitch your business to Venture Capital firms to gain financial support in exchange for equity (shareholding) in your company. This brings the benefits of potentially gaining investors who can provide advice and expertise for your business. However, one of the pitfalls of gaining venture capital is the competitive nature of the industry, which can make it difficult to convince firms to fund your company. VC’s mainly focus on fast-growing startups which appear to be stable and lower risk than less established new businesses. A large amount of time-consuming work and effort often goes into acquiring the backing you require and may not be feasible for smaller, riskier businesses.

4. Angel Investors

Angel investors, often known as high-net worth individuals, want to invest their personal money and make their own decisions about investment opportunities. They can often provide less finance than a venture capital firm, but have the potential to back riskier prospects. Angels can also bring valuable ideas and advice to your business. When looking for this type of financing, angel investment networks and syndicates are a good place to start.

5. Corporate Investments

Similar to Angel Investors, large corporations can choose to invest in other businesses. They can often invest more than individual angels due to the higher worth of companies compared to individuals.

6. Crowdfunding

There are various forms of crowdfunding with the most relevant for funding small to medium-sized enterprises (SMEs) including, peer-to-peer lending, peer-to-business lending, reward-based and equity crowdfunding.

Peer-to-peer lending involves investors lending money to an individual for a fixed interest rate.

Peer-to-business is similar to peer-to-peer lending but with loans for businesses, instead of individuals, via investors, companies and government institutions.

7. Grants

Grants are available for businesses from the government and other institutions.

In 21st century where the market is full of competion, risk, Uncertainity, Regulation, barriers It becomes very essential for a new firm to arrange the finance wisely.The new venture with the help of financial planning and expert opinion can choose among the different options available for finance.

The planning becomes essential because the Finance providers affects the firm by implementing a pressure of fixed cost to the firm.