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Your Assets and Raising Business Funds

By: Garry Crystal - Updated: 3 Jan 2013 | comments*Discuss
Assets Business Business Funds Funds

Using your assets and raising business funds is an option that may work when financing a new business. If you are looking to place your own initial investment into your business then using your own assets as a funding resource may be the ideal solution. When looking at your assets you may be surprised to find that you can raise more cash than you had originally thought.

Why Use Your Own Assets?

There are a number of reasons why people will use their own assets to fund their own business. All new businesses will usually need an initial injection of cash before other investors will consider supplying any additional business funds. Personal assets built up over the years may be the quickest way to raise funds without the need to borrow more money. But when start-ups do consider using their assets, in most cases, the biggest asset they will have is their own property.

Remortgaging To Fund A Business

Remortgaging is one of the most popular ways to raise business funds. If you have had your home for a number of years then releasing some of the equity may be an option. Remortgaging is also a good way of finding lower interest mortgage loans and obtaining cash at the same time. There is also always the option of selling your property and moving to smaller property while building up your business. Remortgaging and selling should be considered very carefully; this is your home and there is a big risk factor involved. Finding the right remortgage deal is essential and using professional business advisors will be beneficial before taking this option.

Considering Your Assets

Sitting down and writing out all of your assets will be a way to gauge how much cash can be raised. You may have items that can be sold to raise cash that you have never considered before. Many people will sell whatever it takes to fund their new business; precious collections that have been built up over the years, family heirlooms, even the family car. Look at the long term potential of selling your assets and placing them into a business where the return may be higher. This may be a case of making your assets work for you now in order to provide a higher long term return.

Investments as Assets

Many people have investments including stocks, shares, and life insurance policies that can be converted into cash. Again, these need to be weighed up as funding options. In some cases cashing in policies or investments may not provide a high enough return depending on how long you have had them for and how much has been placed into them. Weigh up whether or not you will get a good enough return by cashing in these investments or will it be a wiser option to leave the policies until they reach maturity.

Other Finance Options

Close friends and family members can also be viewed as business assets. Obtaining loans and investments from your nearest and dearest is a popular option when raising funds for start-up businesses. You may be surprised at how many will be willing to invest some money in your business idea, especially if it looks to bring a better return than the interest rates from their own banks. This is one asset that a huge number of small start-up businesses rely on for both financial and personal support.

Personal Circumstances And Credit Options

You may have some of your own personal savings and these will probably be the first thing that will be invested into a new business. Your good credit record will also be an asset when raising funds. There is many a new business that has been started by borrowing loans and borrowing using credit cards. Redundancy money is also another reason why people start their own business. Although it may seem strange to say, losing a job in this way does present a golden opportunity to invest in a new business. Taking early retirement can also be a good way to finance a business if you have built up a sufficient pension package.

Your assets can be worth a lot more than you think and can go a long way to raising funds for your business. It may ultimately mean an initial change in your lifestyle and cutting financial corners for a while. However, releasing the equity on your assets may be worth the risk if the business idea is a viable prospect. Taking good business advice will be a way to assess the risk and to gauge the long term feasibility of your new business idea.

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