Philip Harman Grants for Starting a Business: Whose Door Should You Knock?
If there is anything that is the most important thing in today’s world, that is money. It is obvious that people won’t just give you money without any vested interests (unless they are your parents)! To allow (read: compel) them to give you money, you can do one thing – and that is by starting a business. But there again rises one other problem – whose door to knock for the money? They could be either or all of the 3 sources mentioned below:
The Government
The government has been continuously infusing money into the economy fearing that the economic condition would demolish otherwise. Bail-out-packages and similar policies are helping the economy to look up again.
For the welfare of the people, the federal government also wants to recognize new faces in small businesses and therefore huge impetus is being given to the Small Business Association that in turn provides funds for the same. It is to oversee that a business idea, if credible should fall through, the problem of funds notwithstanding.
Banks
If there was one institution that is always regarded as the savior of businesses, they are the banks. In fact, the banks gave so much on credit (without realizing that they will in a red) – that when their borrowers applied for bankruptcy, banks had to declare bankruptcy too! Banks could not find means to book their borrowers because the law of the land protected the genuine entrepreneurs well. The government finally had to intervene with stimulus packages to bail them out of the red.
This incident has made banks very shy of investing with unrecognized faces and it follows that if you don’t have a credible credit record sheet backing you, getting a loan could be even more difficult than you think. Therefore young entrepreneurs have to knock the doors of private sources.
Private Sources
Venture Capitalists (VCs) and Angel Investors make up the main part of lending institutions in the private sector; it is like people are helping their kin with the money they garnered in their lives to help them on with their business. It is like a brother-helps-brother thing. Venture capitalists are the most sought after people to seek when you seek funding for your small business. But the new breed of private investors – the angel investors are catching up fast, owing to lesser inhibitions to proving money and also lesser legalities to take care of.
Since angel investors are new in this lending business, they are looking to build their base to lure small businesses to take loans from them. Very rarely do angel investors match up to the one time funds allowed that the VCs are capable of. When talking of small businesses, a package ranging from $ 10,000 to $ 1 million is usually good enough – the big angel investors are capable of such amounts too! It would be better if the money came in stages rather than all at once because that would make the fund management easier and keep the new entrepreneur in control too!
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