How to Fund Your Business in Australia

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10 Ways to Fund Your Small Business
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• During the life of most any business, the
  owner will need to seek out cash to help with its
  growth or to keep it going through a rough patch.
  So, planning how to fund a business is hardly
  a trivial or brief topic. Indeed, a thorough
  discussion would take much more space than we
  have here.
• However, we can provide an overview we hope will
  help start you thinking about your
  business options.
• First, there are two ways to externally fund a
  business debt and equity. When debt is used, the
  investor receives a note for his or her cash. The
  note spells out the terms of repayment, including
  timing and interest. The benefit of using debt is
  that you retain ownership of your company. The
  downside is that you have an obligation to repay.
  If you fail to meet your commitment, the lender,
  under certain circumstances, can force the
  company into liquidation.
• Then there's equity. An owner who uses equity to
  fund a business turns over an ownership stake to
  an investor in return for the latter's cash. The
  benefit is that there is no obligation to repay
  the investor. The downside is the owner has to
  give up a part of the ownership of his or her
  business. This can entail losing some control
  over the company.
• There are many different sources of equity and
  debt funding. Well briefly consider several
  examples.

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Equity

• Bootstrapping
• The business funds itself. As the business grows,
  it throws off cash that enables further growth.

• Self-funding
• Many entrepreneurs fund their businesses
  themselves. They use savings or personal debt
  (such as a second mortgage or credit cards).
  Alternatively, they sell assets to generate cash
  (e.g., a second home or a boat) for the business.

• Friends and family
• friends and family can provide either equity or
  debt funding. While this may initially seem like
  a good source, be careful about selling part of
  your business to this group. Unfortunately,
  businesses fail. The loss of capital can then
  cause hurt feelings, ruin friendships and make
  for unpleasant family gatherings. Be sure that
  your investors know the true risks.

• Angel Investors
• Search online for local angels or talk to your
  chamber of commerce. Your local chamber may know
  who is interested in funding new ventures and
  ideas in your area.

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• Cloud funding
• There are a number of groups that will allow you
  to pitch your ideas to investors via the
  internet. Typically, when this type of funding is
  successful, multiple investors will contribute
  funds to the idea. 

• Partners 
• Taking on a partner can be a source of funding.
  The partner may or may not become an employee of
  the business. Strategic partners can benefit the
  business by aligning resources.

• Venture capital
• hese firms provide early-stage funding, but are
  typically looking to make relatively large
  investments and take a significant share of the
  company -- often a controlling interest.

• Crowdfunding
•  These are primarily web-based projects and allow
  individuals with a business, idea or project to
  reach out to thousands of potential investors
  through various platforms. Investments can be
  debt, equity or rewards-based.

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Debt

• Small business lenders
• Many organizations are interested in lending to
  small businesses. Try Googling small business
  loans to see the plethora of results. Most
  lenders will want the loan to be secured by
  assets of some type, and rates may be high.

• SBA loans
• The Small Business Administration has many
  programs, but in general, these loans require a
  guarantee that the loan will be repaid, to enable
  businesses to get loans from traditional lenders.

• Banks 
• Traditional banks make small business loans.
  However, they typically require a track record
  and will often want the loans secured with assets.

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There are more options for funding small
businesses than we can cover here. However, with
a good business plan and much persistence,
funding can be secured.
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