Sources of financing for business & professional

SOURCES OF FINANCING FOR
BUSINESS & PROFESSIONAL

Business Resource Group ™2012

Identified Areas For Financing:

 Professional fees dues
 Office space rental
 Equipment and supplies
 Business fees such as permits/licenses,
 setting up business structure, etc.
 Setting up services such as phones, Internet, etc.


Areas of Financing
 Creation of marketing materials such as business
cards, website, etc.
 Cost of running a business including monthly fees
 Professional service fees for accountants, lawyers, etc.
 Employee wages
 Startup Loan
 Emergency funds
 Selling of professional idea or product or services
 Strategic partnership
 Buy in ownership of the firms


SOURCES OF FINANCING

I. External
II. Internal


Internal Financing


i. Friends And Relatives

Funds from friends and relatives who believe in the business and its service or product
concept is a possible route to take


ii. Life Insurance

Professional service entrepreneur can also
convert their investments in life insurance
policies and other insurance products as a
source of funds for their business usually at
a very low value, funds borrowed at very
low interest


iii. Leasing

You should consider adopting leasing financing especially for cost associated with the
startup cost rather than buy this equipment’s. A lease requires little or no money down
and is an alternative to purchasing such item as cars machinery or office equipment


iv. Retirement Plans
Professional can also use their retirement
plan as an alternative source of financing
for professional seeking to fund their
businesses. There are various independent
retirement plans that are flexible that allow
professionals to borrow against vested
Different countries would have different
benefits.
retirement plan arrangement from which
people can borrow from them.


v. Informal Saving Sector

Internally in most corporate set up professional have adopted internal revolving and
informal revolving funds, to advance lump -sum amount to meet the welfare and
economic needs of members. This revolving funds if well harnessed, the professional
could use them to fund start up


vi. Venture Capital
Private equity firms and venture capitalist are
also an additional source from which
professionals can look towards as they seek
alternative source of finances that is not
attached to specific collaterals. It is recognized
that these P/E & VC could support startups
and emerging growth companies that that are
run by professionals but rather lack access to
bank loans and capital markets access to funds
in form of equity into their businesses.


vii. Personal Savings

Professionals would also easily use their
professional earning saving to make it a
source for financing for their business in
future or when they might require it.


viii. Sell Assets

Asset sales to relatives and friends can offer
a neat and relatively simple alternative to
either loans or equity deals. Put simply,
professional service firms can sells one or
more assets to someone or a firm they
know or trust, the firm


ix. Rewarding A Loyal Management
Team

Professional service businesses can also start up schemes in their business that is aimed
at rewarding loyal management team to invest in professional business since they share
your vision, Partners can give loyal management between 10% to 30% equity in this
business


x.

Profit ploughed back into the firm as reserves


xi. Trade Creditors

A very important source of financing for your professional
service business may be from the creditors and suppliers with
whom you do business


External Finance


i. Government Funds

Many government have set up fund that can easily be used by new start
up & young professional, one of the objective of this fund is to attract
and facilitate investment in micro, small and medium enterprises
oriented commercial infrastructure such as business or industrial parks,
stalls, markets or business incubators that will be beneficial to youth
enterprises


ii. Money Lenders

Borrowing from money lenders
business incurs risk and charges a
corresponding rate of interest based
on that risk. The lender usually
assesses a variety of factors such as
the strength of your business plan,
and your personal credit history.


iii. Cooperative Society
Professional can also access funds available
through various professional saving and
cooperative societies where they are members. In
Some countries there are a lot of professional
SACCOS, and they continue to provide low
interest rate loans, spread over long terms than
banks and usually will not require collateral
other than guarantee, which is easily provided
by fellow professional reference


iv. Loan From Banks
These are funding from commercial, the
community banks and specialized bank like
CDSC accounts. Professionals with investments
held in stocks can borrow on account of these
investments.

And those with collateral held in group,
partnership or joint venture entities can also
borrow on this accounts.


v. Selling Your Business Ideas-
Business Partners

Professional with vast experience and with new ideas to set up businesses could as well
begin to sell their ideas and concept high networthy individuals willing to invest their
fortunes in their businesses.


vi. Multinationals

Some multinationals in their attempt to set
up a foot print in the local market have
failed so they are likely to support local
professional service firms and create a

working relationship.


vii. Strategic Partnership- Corporate
Support
Strategic partnering , they're the best
alternative for many companies that find
themselves either shut out of traditional
finances deals or unwilling to swallow the
equity valuations or interest charges
required to make those deals happen.


viii. Debentures

Just like shares, DEBENTURES are
also instruments for raising long term
finance “Debenture is a document that
either creates a debt or acknowledges .


ix. Securitization

Is the financial practice of pooling various types of contractual debt and selling said
consolidated debt as bonds, pass-through securities


THANK YOU

MILTON-OCHIENG@HOTMAIL.CO.UK


Sources of financing for business & professional

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Sources of financing for business & professional