External Funding

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Finding funding takes time, effort, energy and emotional commitment. Be prepared to fully understand your business so you can convince other people to believe in it as well. If you’re looking to raise funds from other people or to borrow money, you want to establish that you have the ability to pay off your debt and that your risk level is low.

Figure out whether you need money to get started with your business or not, and what kind of money is best for your business - a loan, crowdfund, donation, etc.

The person or bank or institution that is lending you money will want to know that you will be able to pay back the money in full and to provide them a return for lending you the money in the first place, this is usually the interest rate. There is usually a date in which you have to pay back the full amount by.

Your risk level is lower if you’ve demonstrated that you can pay off the loan in a realistic time frame. For example, if you already have sales, it’s much easier to prove that your business can generate income so that you can pay back a bank loan.

Having a good understanding of your business such as your costs, revenue, and profits will help you do this!