Sources of financing for business & professional


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Possible avenues to source for business finance for start up, busineses and professionals, and entreprenuers

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Sources of financing for business & professional

  2. 2. Identified Areas For Financing:  Professional fees dues  Office space rental  Equipment and supplies  Business fees such as permits/licenses,  setting up business structure, etc.  Setting up services such as phones, Internet, etc. Business Resource Group ™2012
  3. 3. Areas of Financing Creation of marketing materials such as business cards, website, etc. Cost of running a business including monthly fees Professional service fees for accountants, lawyers, etc. Employee wages Startup Loan Emergency funds Selling of professional idea or product or services Strategic partnership Buy in ownership of the firms Business Resource Group ™2012
  4. 4. SOURCES OF FINANCING I. External II. Internal Business Resource Group ™2012
  5. 5. Internal Financing Business Resource Group ™2012
  6. 6. i. Friends And RelativesFunds from friends and relatives who believe in the business and its service or productconcept is a possible route to take Business Resource Group ™2012
  7. 7. ii. Life InsuranceProfessional service entrepreneur can alsoconvert their investments in life insurancepolicies and other insurance products as asource of funds for their business usually ata very low value, funds borrowed at verylow interest Business Resource Group ™2012
  8. 8. iii. LeasingYou should consider adopting leasing financing especially for cost associated with thestartup cost rather than buy this equipment’s. A lease requires little or no money downand is an alternative to purchasing such item as cars machinery or office equipment Business Resource Group ™2012
  9. 9. iv. Retirement PlansProfessional can also use their retirementplan as an alternative source of financingfor professional seeking to fund theirbusinesses. There are various independentretirement plans that are flexible that allowprofessionals to borrow against vested Different countries would have differentbenefits. retirement plan arrangement from which people can borrow from them. Business Resource Group ™2012
  10. 10. v. Informal Saving SectorInternally in most corporate set up professional have adopted internal revolving andinformal revolving funds, to advance lump -sum amount to meet the welfare andeconomic needs of members. This revolving funds if well harnessed, the professionalcould use them to fund start up Business Resource Group ™2012
  11. 11. vi. Venture Capital Private equity firms and venture capitalist are also an additional source from which professionals can look towards as they seek alternative source of finances that is not attached to specific collaterals. It is recognized that these P/E & VC could support startups and emerging growth companies that that are run by professionals but rather lack access to bank loans and capital markets access to funds in form of equity into their businesses. Business Resource Group ™2012
  12. 12. vii. Personal SavingsProfessionals would also easily use theirprofessional earning saving to make it asource for financing for their business infuture or when they might require it. Business Resource Group ™2012
  13. 13. viii. Sell AssetsAsset sales to relatives and friends can offera neat and relatively simple alternative toeither loans or equity deals. Put simply,professional service firms can sells one ormore assets to someone or a firm theyknow or trust, the firm Business Resource Group ™2012
  14. 14. ix. Rewarding A Loyal Management TeamProfessional service businesses can also start up schemes in their business that is aimedat rewarding loyal management team to invest in professional business since they shareyour vision, Partners can give loyal management between 10% to 30% equity in thisbusiness Business Resource Group ™2012
  15. 15. x. Profit ploughed back into the firm as reserves Business Resource Group ™2012
  16. 16. xi. Trade CreditorsA very important source of financing for your professionalservice business may be from the creditors and suppliers withwhom you do business Business Resource Group ™2012
  17. 17. External Finance Business Resource Group ™2012
  18. 18. i. Government FundsMany government have set up fund that can easily be used by new startup & young professional, one of the objective of this fund is to attractand facilitate investment in micro, small and medium enterprisesoriented commercial infrastructure such as business or industrial parks,stalls, markets or business incubators that will be beneficial to youthenterprises Business Resource Group ™2012
  19. 19. ii. Money LendersBorrowing from money lendersbusiness incurs risk and charges acorresponding rate of interest basedon that risk. The lender usuallyassesses a variety of factors such asthe strength of your business plan,and your personal credit history. Business Resource Group ™2012
  20. 20. iii. Cooperative SocietyProfessional can also access funds availablethrough various professional saving andcooperative societies where they are members. InSome countries there are a lot of professionalSACCOS, and they continue to provide lowinterest rate loans, spread over long terms thanbanks and usually will not require collateralother than guarantee, which is easily providedby fellow professional reference Business Resource Group ™2012
  21. 21. iv. Loan From BanksThese are funding from commercial, thecommunity banks and specialized bank likeCDSC accounts. Professionals with investmentsheld in stocks can borrow on account of theseinvestments. And those with collateral held in group, partnership or joint venture entities can also borrow on this accounts. Business Resource Group ™2012
  22. 22. v. Selling Your Business Ideas- Business PartnersProfessional with vast experience and with new ideas to set up businesses could as wellbegin to sell their ideas and concept high networthy individuals willing to invest theirfortunes in their businesses. Business Resource Group ™2012
  23. 23. vi. MultinationalsSome multinationals in their attempt to setup a foot print in the local market havefailed so they are likely to support localprofessional service firms and create aworking relationship. Business Resource Group ™2012
  24. 24. vii. Strategic Partnership- Corporate SupportStrategic partnering , theyre the bestalternative for many companies that findthemselves either shut out of traditionalfinances deals or unwilling to swallow theequity valuations or interest chargesrequired to make those deals happen. Business Resource Group ™2012
  25. 25. viii. Debentures Just like shares, DEBENTURES are also instruments for raising long term finance “Debenture is a document that either creates a debt or acknowledges . Business Resource Group ™2012
  26. 26. ix. SecuritizationIs the financial practice of pooling various types of contractual debt and selling saidconsolidated debt as bonds, pass-through securities Business Resource Group ™2012
  27. 27. THANK YOUMILTON-OCHIENG@HOTMAIL.CO.UK Business Resource Group ™2012