Money is the blood of every business. It turns your vision of a dream company into reality. With the necessary funding, you can set up your business according to your preference and plans.
The money you invest in your business is called capital. Financially speaking, capitalization represents the book value of your company.
The initial funding is very important because you will not be able to start operations without buying some things, like office equipment and supplies. When you register new company, you also need money to hire employees, rent an office space, and pay off expenses related to your business.
Now the question is: how can you fund your business the best way according to your financial position right now? Let this article provide you some important insights on how you can get capital for your business in Singapore.
Different Ways of Acquiring Capital for Your Business in Singapore
Here are some suggestions for you to have the needed capital for your business in Singapore.
Bootstrapping: Betting on Yourself
If you are starting up a business that requires only little financing, using your own money—or the so-called bootstrapping—may be the right choice for you. You may use your savings to finally turn your dreams into reality. Hopefully, this can also lead to profits.
It is ideal to self-fund if you are a first-time entrepreneur because you will not be tied to anyone and you carry your own burden. It is a relief not to think of regular debt payments, especially when you are just starting.
Self-funding may also be easier because you do not need to settle various paper works compared to acquiring loans, which are subject to approval from the banks first.
Applying for a Bank Loan
If you do not have enough money at the moment, you may consider applying for a bank loan. This might be the way to go to have the capital for your business in Singapore if you need a big sum immediately. Securing a bank borrowing can help you beef up your capitalization, especially if you have only little savings.
The way this works is the borrowing, should you secure one, will be paid with corresponding interest and periodically—all these depend on the terms of the borrowing. You can actually use the earnings from your business to pay off the loans slowly but surely. This is why you must make sure that your business is profitable.
As a borrower, you must ensure that you have a high credit score. The higher it is the better chances of your loan getting approved immediately so you can start your operations.
Funding from an Angel Investor
Angel investors are business-minded individuals who have the money to provide capital for your business in Singapore. They have a net worth of exceeding $1 million or an annual income of over $200,000.
These types of investors can be truly beneficial for you, but you have to prepare a well-put business plan first. After all, they would only throw their money on something that generates profits. It is only practical for them to do so.
Accounting Your Business Finances
Keeping tab of every financial transaction of the business is very essential. By doing so, you will have an idea of how your business is performing. If you need accounting service, do not hesitate to reach out to 3E Accounting. They are a team of experts ready to help you and your company.