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Start Up Finance The entrepreneur will need to finance to the business. This means they will need to find money to pay for: The purchase of plant & machinery, office equipment etc Renting or buying premises and offices (e.g. the first 3 months’ rent may need to be paid in advance) Essential business services such as insurance The purchase of stocks of raw materials and components to allow production to start The wages and salaries of the first employees to join the business (who may be needed before any goods or services are actually sold) To provide financial cover whilst the business waits for customers to pay The main ways in which an entrepreneur can find finance for a new business are: Own money Bank loans Bank overdraft Money from friends Grant assistance from government bodies The business can also split the types of finance into categories relating to length of time the money is needed for Short-term: bank overdraft Medium term: bank loan; lease; hire purchase; government grants Long term: bank loan; mortgage; share issue (for limited companies); debenture |