For the success of your business creation project, it is essential to find the resources for its financing. In practice, several solutions can be envisaged. But in general, either the project is financed by its own resources, or we will resort to a request for financing from external sources. What are the different means of financing a business creation project? Where can the necessary funds be found for this purpose? Before starting your business, here are some interesting tips that can help you make the right choice of financing.
To finance the creation of your business, you are really free to use your own resources. As an advantage, you will not depend on any financial institution. For example, in the case of a sole proprietorship, the contributions in question are the resources of the operator himself. As a sole proprietorship, its contributions do not constitute the share capital of its business which, moreover, does not exist for this type of company. Consequently, the operator is not obliged to keep his contributions in his company’s account. In the case of a company, it is the partners or the shareholders who will bring their shares of money for the constitution of the share capital. In any case, it should not be forgotten that such a choice of financing requires a fairly large equity capital.
Both among professionals and among individuals, loans remain the most used for the financing of business creation projects. In concrete terms, you just need to prepare the most convincing business plan possible so that the credit institutions grant you a quick personal loan or other types of loans as soon as possible. Otherwise, your funding application file must be based on fairly credible ideas or hypotheses. The best would then be to proceed in such a way as to present documents proving that your project is really feasible and fruitful. However, it is quite possible that the banks ask you for a minimum of personal contributions before being able to release the borrowed funds to you.
In a very simple way, equity investors commit their money to the incorporation of your company in order to make profits in the future. However, this is not possible for the creation of a sole proprietorship. If some people appeal to these equity investors it is because they can benefit from the advantages.
First, you will never be forced to repay the funds because these investors will benefit from their dividends at the end of each financial year. Otherwise, they can also realize a capital gain in the event of the resale of their securities. Then, their contributions will increase the credibility of your company with your partners and banks. Finally, you will also have the opportunity to benefit from the expertise of your investors during the incorporation or even during the years to come.
Finally, public bodies can also meet your financing needs for the creation of your business. Here, public aid often consists of state subsidies or subsidies from the European Union. In addition, other specialized public bodies are also accredited to help you finance the launch of your business. However, subsidies can only be granted to types of business predefined by the French State. Despite this, no financial compensation is required from the contractor. This reduces the financial risks associated with setting up a business and can also increase your credibility vis-à-vis your future investors.