Right from the time when you establish your company to the time you reach saturation, you are constantly in need of funds. You need money for every single task you perform in the organisation – be it paying the workers, incurring advertising costs, operating machines or paying the rent and bills. It is manageable if you require a smaller initial capital for your company. However, it is difficult to arrange money quickly if you need it for large scale purposes. You may need money to invest in a fixed asset. You may need money to increase your capital. You may need money to revamp your business and start fresh. In all these cases, the best source of long-term finance is borrowing funds. The most common means of borrowing for a company are the commercial banks. There are also several other sources of long-term finance if you don’t want to go to banks for borrowing. Crowdfunding has emerged as an effective method of gathering some long-term finance. With a large number of investors contributing small amounts of money, it is a flexible and hassle-free way to get funds for a longer period of time. Another important way to raise long-term funds is by approaching the peer-to-peer (P2P) firms. These firms perform the same functions as the banks, but lend money at a much smaller rate of interest. This makes it more favourable to the growing businesses to approach them and get finances for a longer duration. Apart from giving loans and advances, these firms also offer facilities like cash flow financing, business overdraft and many more. Thus, such P2P firms can help you out with your construction finance and asset finance if you want to take long-term loans from them.
There are many other ways of borrowing funds which can finance your company over the long term. However, you should be certain about the lender. You should never close the deal and accept the money without being sure about the identity of the lender. You should also decide upon the amount of interest that is to be paid by you. When the deal is finalised, you should always get a written contract and get it signed by the lender. This would avoid any confusions or conflicts in future.
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