How to Finance Your Business Idea?

How to Finance Your Business Idea?
Stefan Ivanovic

Glopinion by

Stefan Ivanovic

Mar 31, 2019

In today's business environment, there are fewer jobs you can run without initial investment. For most young entrepreneurs and companies that are in the initial stage of development, finance is a major problem for starting a business or for further development of the company.

The lack of one's own resources is one of the most common reasons why many business ideas never see the light of the day and that's why in today's text I will point out several ways of financing the business.

Family and friends

Some of the first sources of funds we can turn to are family and friends, and they are really a great choice if you do not want to share your business with others, or you are not ready to go into credit arrangements. Here, it's not usually about large sums of money, but your idea depends on how much money you really need. Also, in this way, you will not have an additional financial burden in the part of the cost of interest on borrowed funds, nor will you be in a situation to suffer investor pressure, which opens up space for a more relaxed job launch.

Of course, you should not look at loans from the nearest ones less seriously than a loan taken from a commercial bank. You have to keep in mind that this is about business and it is necessary to draw a clear line between the private and the business, as the potential failure in one aspect would not negatively affect the other.

Banks and microcredit institutions

Depending on the plan you have, you can use different models of funding that banks and microcredit institutions offer.

Also, there are dedicated short-term and long-term loans for businessmen, if you already have your business, and you are missing money for further development or investment. If you are convinced that your business will bring success, taking loans from traditional providers of these services is one of the simplest ways to get the money you need for your business. The favorable conditions for financing business with banks and microcredit institutions is proportional to your creditworthiness.

Funds and grants

Depending on the business you want to start, there may be development organizations or dedicated funds that provide loans or grants.

These are mostly investments in business ideas that fit into some broader strategic guidelines for the development of the national economy, such as the development of agriculture, increasing energy efficiency, and the like. These institutions most often offer more favorable financing conditions such as low interest rates and longer repayment periods in the case of lending, or non-refundable funding, in the case of grants. Grants are usually less money, while loans taken from these organizations can reach very high amounts of money.

Review all the circumstances associated with you or your business, to know what kind of funds or grants are ideal for you. There are institutions that provide financial services to single parents, members of certain minorities, only graduates, certain types of businesses (types of eco-production) and the like.

If you, or your business idea belong to a specific category, it is very likely that there is a source of financing to which you are the target group. Take a look. It's not easy to get these favorable financing schemes, but it's really worth paying attention to the time. However, if you do not try, there is no chance of success. Also, you can send a written business project to multiple addresses.


In every society, there are people, institutions and companies that are interested in financing a business idea that can profit them. Ask which companies have a history of diversified investments and recognize the companies whose business your business would use.

Finally, talk to people, find who your idea is interested in. What you need to know about investors is that they become your partners. Unlike loan repayment and after repayment, you keep your business, in this case, the investor most often becomes part of your business.


One of the newest ways to start your own business is fundraising. This is an ideal way to fund art projects such as design, music and other creative industries. Sites like IndieGoGo allow you to present your idea to the whole world and ask individuals to fund your business plan. People around the world can charge you an arbitrary amount of money and so push your business. You can set the conditions such as the minimum grant, but also the share in the future company in relation to the funds invested.

The difference is that you do not ask for funding from institutions, but from millions of individuals. This source of funding is very convenient, as you determine the conditions and allows you to finance businesses for which traditional investors are not interested. There are many sites that offer crowdfunding services. Search, inquire about conditions and place your creative idea all over the world.

Tip for the end

There are many ways to finance business ideas. Understanding all the circumstances that are related to you, your business idea or company is the first step towards finding the right financing model. In addition, before deciding on the amount you need to start your own business, I advise you to create your business plan, as well as to consult with people closest to you and present your idea to them. Constructive criticism is always welcome and will help you to see the possible shortcomings that you overlooked.

I wish you a lot of luck in your next business venture!

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