Which is the best source of monetary capital to start up a business?

[Yhubee]

To start up a business, the individual is mostly faced with the challenge of getting a capital for his or her business.
For some people, they might prefer to get their capital from their personal savings, but a question comes, will their savings be enough to cover all the expenses?
Well, it may and it may not depending on the nature of their business and if they had planned very well before hand to save enough for this purpose. Also , this source is good as you do not have to pay back the money to anyone since its directly from your savings.
For others, they prefer to borrow money from their friends or their family members which they plan on refunding at a certain time.
Another category of people may choose to get a loan from the bank to start up their business and pay back at a fixed time. Now concerning the loan, the business owner has to make sure he or she pays back on tbe fixed date to avoid issues.
I have thrown this question at some business owners and while some preferred to get their capital from their personal savings , others preferred getting a loan saying their savings were not enough to fund their business.
Which of these sources is preferable ?

 

[Kingsley]

So many potential business men and women are struggling with how to raise capital to fund their business ideas and many are battling with how to get enough fund to run their business as a form of working capital. And sometimes when you consider the reasons why they are having this challenges you will realise that it all boils down to what is going oin with the economy mostly at this particular point in time, when the inflation level is nothing to write home about, and the rate at which the cost of energy in the country is skyrocketing on a daily basis is so unbearable this is had a very sharp effect on the cost of all commodities in the country as at today. Hence so many potential and existing business person's depend heavily on loans to run their businesses. And the effect of loans on the business of people is highly unfavourable as people tends to use their profit to pay up interest and their capital goes into the payment of principal, hence i always advice people to work for a while to be able to gather funds to support their business, that is is best way to go.

 

[moonchild]

I've written about this before, if you're struggling to raise money for your business then you should consider taking up a job it will help you in making money and saving enough to be able to fulfill you basic needs and also to start your desired business.

I don't see the point in asking a relative for a loan to start a business, you need to be able to carry your weight yourself nobody owes you, if you want to start a business then get a job and start saving for it, and when your business expands you can then start thinking of expanding and taking up loans from banks and other financial Institutions.

If you take a loan for example from a bank you won't have a peace of mind to execute your plans because you'll be worrying too much about what could go wrong and in that state of panicking you can make some bad choices that can render your business unprofitable and you'll be back to ground zero, finding ways to repay the loan because banks don't entertain excuses.

Starting a business is like rolling the dice you don't have an idea whether it will click or not.

 

[TOZZIBLINKZ]

a lot of people who have good business ideas are faced with the challenge of not having sufficient capital or not even having capital at all and so their business ideas just remain ideas because of this problem . Personally I would say the best source of capital someone can use to fund an offline business is the capital he accumulated either by saving , or income earned from working on online websites and jobs . But in some regions especially in developing countries who are normally faced with poor economic and political stability which affect the people's ability to save and accumulate wealth . and so individuals residing in regions like this have no other choice than to seek loan from the bank , or from friends , and relatives .

Seekingloan from Friends bank and relative is actually not a bad idea in fact a lot of people today have successfully fund their business from money they receive from others . But it is important we point out the riskiness in collecting a loan to establish your business . one thing we must understand about collecting alone is that we must have an alternative in case our business establishment do not go as planned .

 

[funmi]

Yes I very much agree with the idea of getting a job first and working for a while so that one can raise some funds from the salary one will be earning from the job. I don't really think there is anyone who do not wish to have his or her own business as soon as they retire from their regular job. I believe every wise person will definitely be thinking of something that they can leave behind for their children when they are no more. It is only a wicked fellow that will not want to leave something behind that his or her family can inherit and so that it will also serve as a legacy. So my advice is for everyone that wants to start up a business to make a very good plan towards it. They should not allow finance to be a problem, they should start saving now that they are still working no matter how little their savings may be, it really doesn't matter what matters is saving something that can be used to establish no matter how little that thing may be. With time it will definitely grow and they don't need to depend on loans

 

[Sotherefore]

There are different ways people can raise the needed money to start up a business but most of the time some entrepreneurs sometimes do not have the understanding that they can effectively start up the type of business they are interested with their own personal capital .

Some business does not even require you to have up to the needed capital to start it , it is just something you have to start it up with the little capital you have , from there you can grow it to the standard you expected it to be .

A lot of people will prefer to borrow money to start their business , well to their understanding they believe that if they can get money from people to start up a business that they will be able to pay back the money if the business is successful. But the question here is that , what if the business is not successful how will they pay back the money they have collected ?

To me borrowing of money to start a business is not the best option but people should try as much as possible to raise the money they need to start up a business or possibly source for grant somewhere.

 

[Abigael]

There are truly so many sources of capital as you have mentioned. A business owner has to choose the best source carefully so as not to run into any trouble while running the business.

Personally, I prefer using my own savings as source of business capital. This is because I won't have to pay back anyone once I start running the business. There is a lot of peace that comes with knowing that you don't owe anyone any money. You just run the business with no pressure of earning profits so fast.

I know the savings may not be enough to to run the business. That is why I am open to trying other sources of capital. But first, I will try my best to ensure that I can start the business with the little I have then grow the money with Time.

I also love the idea of asking for help from family and friends. I have a good circle of those who believe in me and so I know I will be supported by them. When borrowing for funds from family and friends, they need to really trust you that you will do the best job with the money that they give you.

 

[Mika]

This depends on the funding source available to you. If you have enough savings to start a business of your choice, this is the best funding source because its your own money, you do not have to pay back, you do not have to pay interest, and even if your business fails, the loss will not be great (provided, you invested the amount that you could afford to lose). If you do not have savings but you have wealthy friends and relatives who are willing to help you, this is also good funding method. Since your friends and family care about your success, you can take time to pay back.

 

[Yusra3]

The best source of startup capital often depends on the business's needs and stage. Personal savings or loans from friends and family are common for initial funding. As the business grows, entrepreneurs may seek angel investors or venture capitalists for larger investments. Small business loans from banks or government programs can also provide capital. Ultimately, the ideal source balances affordability, control retention, and meeting the startup's capital requirements.