What You Need to Know About Small Business Financing | Personal Finance Views

Tuesday, August 14, 2018

What You Need to Know About Small Business Financing

Small businesses need less capital to get start. But even then, many small entrepreneurs find it difficult to start a business on their own and look for assistance in this regard. Even those small entrepreneurs that manage to start their company, needs financial assistance on some part of their venture in order to get going.

There are several ways to get your required small business finances but it is not a simple task by any means. Few may get their desired business loan or investment with very little effort while others remain unsuccessful even for years to accomplish same task. 

small business

There are few reasons that are behind the success and failure of small entrepreneurs to get finance from related authorities or persons. Keeping these things in mind will help you get these funds easily and quickly.

Solid business plan

Whether you want to take assistance from banks or individual investors like angel investors, an important document to prove your expertise and seriousness in small business venture is a strong and executable business plan. This plan must be complete in all aspects and is necessary for all types of companies whether it is a pro service company in Dubai or a small store in New York.

Whether someone lends you money or invest in your business, he/she will take a closer look at your business plan to know the chances of return of debt or gaining profit from his investment respectively. Developing a comprehensive plan will make it easier for you to successfully complete this process. In its absence, your efforts are most likely to end in failure.

Age of business

New companies primarily depend on business plan to attract investors for funding. But if acompany is already running in the market, then its performance makes it easier (or difficult) for the business to achieve success in its case. If your company is showing growth, or at least not in a decline, then there are chances that you can easily get business funding.

Business type

The type of company you are going to start also plays important role in finding business funding. Banks and investors are more likely to take chance with industries in highly dependable sectors like real estate, agriculture, wholesale, insurance etc. On the other hand, it is difficult to get loans, grants and investment if your small business is representing hospitality, retail and other risky sectors.


Efforts are underway on higher level to encourage women to take part in business activities. It is the reason that separate banks and schemes are available on government and private level to fund women in business sector in various countries. Therefore, if you are a femaleentrepreneur, then you are more likely to get financial assistance for your small business as compared to males. 

Banks vs private investors

Several private investors (angel investors) support small startup companies. But these investors are not only in small numbers but also quite choosy in their approach. In this scenario, the best option is government and private banks. 

Usually, there are specific banks for small investors while other banks also provide special grants to small businesses. As small industry play vital role in any country’s economy, so the government takes special steps to promote them. 

About the writer: Mona is an experienced content writer in a Dubai-based consultancy firm, Riz& Mona Consultancy and her writing experience is more than 6 years. During her career, she has acquired lot of experience in writing for various business and investment niches including small business, offshore business, trade, finance, taxation, and others.

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