9.1 HOW TO FIND MONEY TO START A BUSINESS

When you create your business idea and put together your business plan, you must think how much money you will need to start your business. Then you have to think of how to find that money. How much money do you need to start a business? The answer is that it depends on the business. Some businesses need only a little money, while other businesses need a lot of money.

There are different possibilities available for finding money to start your own business:

• ·         Using your own money from your present job’s salary and your savings,
  
• ·         Asking to borrow money from somebody, making an agreement on how to pay it back,
  
• ·         Asking someone to join as a business partner. You start the business together and share the profits together. 

Some organisations or offices may offer support money for starting a business. You can see some examples of these below.

• ·         Microloans are available for small businesses. Community members usually give a guarantee that the loan will be paid. A microloan is a small amount of money that is used to get a business started. The loan needs to be paid back when the business starts making money. Ask around and find out if there are microloans available in your country.
  
• ·     Savings and Loan Association Fund. is a group of people who put their savings together. Then, they take small loans from those savings. After one year, all savings and loan profits are given back to the members. Banks may not be interested in opening accounts for saving money or giving loans to small customers. This association can make it possible to save and get loans for its members. The loan can be used to start a small business. Ask around and find out if there is a Village Savings and Loan Association in your community. Sometimes this is called a Community Cooperative Savings Plan.
  
• ·         Grants are free donated gifts that do not need to be paid back to the donor. The grant does need to be used exactly for the purpose to which it was given, however. Sometimes donors will not give all the money for starting a business, but only part of it. They want to see the starting businessperson also using his own money. Ask around and find out if there are any donors ready to support your idea of a business with grants.
  
• ·     Some donor money is available for a specific purpose which the donor wants to support. For example, there may be start money available for businesses that employ women or people with disabilities. Donors want to see business ideas that support sustainable development goals. These are major ideas that are agreed on by many countries worldwide. See the link at the end of this chapter for more information.