{"id":2878,"date":"2020-03-23T18:07:11","date_gmt":"2020-03-23T18:07:11","guid":{"rendered":"http:\/\/localhost\/2020\/swoopMW20\/?post_type=knowledge-hub&p=2878"},"modified":"2024-03-26T12:02:48","modified_gmt":"2024-03-26T12:02:48","slug":"startup-finance","status":"publish","type":"knowledge-hub","link":"https:\/\/swoopfunding.com\/za\/knowledge-hub\/startup-finance\/","title":{"rendered":"Startup finance"},"content":{"rendered":"\n

Startup finance is a broad term that refers to any kind of finance (i.e. debt finance<\/a>, equity finance<\/a> or grant funding<\/a>) that a startup business might need in order to launch and grow. It’s sometimes used interchangeably with ‘seed capital’, though startup finance is usually a longer-term arrangement.<\/em><\/p>\n\n\n\n

Let’s say you’re a startup business. You’ve got a great idea. You might also have a team in place, a business plan, a budget and a figure for the amount of finance you need in order to meet your short-term needs and grow. You might decide you need funding for, say, three years to cover development costs and startup losses. Perhaps you’ll need finance even after you’ve reached break-even point, especially if your business is seasonal.<\/p>\n\n\n\n

The good news is that there are lots of options for startup finance, spanning debt finance<\/a>, grant funding<\/a> and equity finance<\/a> from crowdfunding or external investors.<\/p>\n\n\n\n

For short-term finance you might consider an overdraft<\/a> (paying interest only on the amount you\u2019re overdrawn each day), factoring<\/a> (selling accounts receivable), a credit card<\/a>, purchase order finance<\/a> or other types of working capital finance<\/a>.<\/p>\n\n\n\n

If you\u2019re looking for longer-term finance then a startup loan<\/a> is one option. There are a large number of lenders (bank and non-bank) who offer loans to startups or new businesses.<\/p>\n\n\n\n

You might find, however, that your business doesn’t currently meet the lending criteria for a startup loan (or for any longer-term business loan<\/a> for that matter). Or perhaps you just don’t want to take out a traditional loan. You could instead investigate crowdfunding<\/a>, peer-to-peer lending<\/a>, business angels<\/a>, venture capital<\/a> and other types of alternative finance<\/a>. Your business might also be eligible for grant funding or for one or more of the government’s schemes to reduce taxes, e.g.:<\/p>\n\n\n\n