According to recent research, around 94% of businesses tend to fail during the first year after inception. Lack of funds is known as one of the most reasons for these failures. Money is considered the bloodline of any business. A fuel of capital is required to execute the idea of a revenue-generating business. Hence most of the enterprises have the same common question in their mind about how to get funds or raise capital.
The market is vast and full of opportunities
Whether it is an individual financial need or commercial need of a business, the market is quite vast. On one side, if we have personal loans in Ireland with bad credit, we also have heavy machine loans. From loans to angel investors, the market is versatile.
The requirement of funds depends upon the nature and type of business. But one can certainly avail various options to raise the capital for business in Ireland. Here is the comprehensive guide that covers most of the finance options that one can avail of.
Bootstrapping the business
Nothing is better than self-funding because you do not need to depend on others. The necessary arrangements of funds on your own are helpful because they solve your issues once and for all.
- Bootstrapping is also known as self-funding. This is known as an effective way of financing the company or raising capital. This option is considered as best one, especially in the case of start-ups.
- Generally, most first-time start-ups find it difficult to get the fundings without showing traction or a plan for potential success. Here one can consider investing from own savings and then let friends or family members contribute towards it.
- This comes with fewer compliances and formalities. Nevertheless, this option is suitable only if it is there is a small requirement at the initial level.
- Some of the businesses need money right from day one. In this case, bootstrapping may not be a good option for them.
Crowdfund the business
Crowdfunding is an emerging way of raising capital for business. Many startups in Ireland have been financed through crowdfunding lately. It is similar to taking a loan but from a group of people.
- Here an entrepreneur or business first puts up a detailed description of the business on any crowdfunding platform. He then mentions the goals of the business and plans to make a profit.
- Here then, the consumers go through this description and offer the money if they like the concept. The money lenders make an online pledge with the promise of pre-buying the product or service.
- Anyone can contribute money to help the businesses under crowdfunding platforms.
- The best thing about crowdfunding is its ability to generate interest and help market the product and financing.
Angel Investment for funding
Angel investors are the individuals who can help businesses with surplus cash to invest in businesses. Here they also work in groups of networks to screen the proposals collectively.
- Many angel investors have helped start-up companies in Ireland. The angel investment generally occurs in the early stages of a company’s growth.
- Here investors can expect up to 30% of the equity. Angel investors tend to take more risk in investment to get higher returns.
- Most Angel investors invest comparatively lesser amounts than venture capitalists. Some people misinterpret them as private money lenders. But in reality, that is the individual investors.
Get Venture Capital for business
Venture capitals are known as professionally managed funds that invest into companies with huge potentials. Here they generally invest into a business against equity and then exit whenever there is an acquisition.
- Venture capitals provide expertise as well as mentorship to the organization on where the organization is going.
- They also help to evaluate the business from a scalability and sustainability point of view.
- Venture capital can be beneficial for small businesses as well, which are already generating revenues.
- If you have a product taking longer to get into the market, venture capital may not be an ideal option for you.
Business Accelerators and Incubators
Businesses in Ireland with early stages can consider availing Accelerator and Incubators program as the funding option.
- These types of funding programs are available in most cities and assist hundreds of businesses every year.
- Incubators are referred to as a parent to the child that nurtures the business by providing the shelter tools and training.
- Accelerators help businesses to run the business or take a giant leap. Generally, these types of funding programs run for around 4 to 8 months and require commitment from business owners in terms of time.
- With this platform, a business can make good connections with investors and mentors.
Raising funds through bank loans
The bank is the first place where businesses seek funding or capital without giving a second thought. Generally, the bank provides two types of loans, including capital and funding.
- Working capital is known as the loan, which is required to run one complete cycle of revenue-generating operations. Here the hypothecating debtors and stocks decide the limit.
- Funding from the bank involves the usual process of sharing the business plan along with the valuation details. Almost every bank in Ireland offers business finance through various programs.
- Several online platforms can help with a working capital loan only in a few minutes. Here these platforms approve the loans by looking at the real-life data of the business.
Get loans from Microfinance companies
If your business is not getting qualified for a bank loan, then one can still consider the option of getting assistance from Microfinance companies.
- Microfinance term refers to the access of financial services to the businesses which could not get access to conventional banking services.
- This has come to a popular option in Ireland for those whose requirements are limited and credit ratings not favoured by the bank.
- Several Non-Banking Financial Corporations in Ireland provide banking services without even meeting the legal requirement of a bank.
Government Programs for Start-up Capital
There are several start-up programs available in Ireland designed to support entrepreneurs with innovative business ideas.
- If your business has the potential to develop an innovative product for sale on the international market, then one can qualify for assistance from Enterprise Ireland.
- Enterprise Ireland offers a comprehensive range of support services to businesses with high potential.
- The support services include business funding, mentoring and practical help to enter the overseas markets.
An entrepreneur can undoubtedly find it easy to get started with a plethora of funding options to raise the capital for a business. It is always better to start with good corporate governance as it may get hard to go back later.