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Finance a technology business: Cheapest ways

In most of the cases, both finance and business go hand in hand. A business owner has a number of costs to consider while going for any technology business and would therefore like to employ a wide range of resources in order to get the financial stability. The business finance can be found in a wide range of options, which include private investments, corporate credit, government loans and business financing program for your technology business. You have different options to finance a technology business with some of them being the cheaper ones, let’s check them out:

Venture capital: There are many books and publications, which benefit for securing venture capital to finance the technology business. The venture capital can be called as an option for startup companies. However, you have this investment option only for a shorter amount of time like for 5 years. Perhaps, this time frame is usually a smaller investment option, which cash out a good return on your investment.

Angle investors: The Angel investor can be called as one of the best options of investing on pre venture capital companies.  This means, the companies that are not meeting up the current requirements of the venture capitalist become eligible for the same. Despite this fact, opting for Angle investors is a wise choice since they invest in certain businesses including the IT sector. So, going with this option can be called as the best bet on earth.

Banks: Most of the business startups usually depend upon their banks to get money to finance their technology businesses. But unless you find the business in operation for a number of years, you end up securing substantial assets and thus find proper financial records and the opportunities of getting the finance goes to minimal. However, the banks can render lines of credit if you see the business owners personally guaranteeing the same.  This simply means that the business owner would be personally liable for the loan repayments. All these lines of credit can render the business with the required working capital. But they simply end up staying very much risky especially when the business is not producing the expected outcome while the owners are unable to repay the bank. The business owners should often use this option for financing your business very much consciously.

Founders, family and friends: One of the best ways to finance your technology business comes via family or friends. There are many businesses, which were able to leverage from the current relationships and thus obtain the finance either like capital investment or a loan for your businesses. Though the source of funding can be simpler to obtain as compared to the others, it can have certain inherent issues. First of all the business owners have the risk of jeopardizing your relationship if you see your business not working at par and going defaults. Furthermore, all these transactions are generally carried out with little amount of formality and without any written agreement, which can further complicate the matters. Also, all such transactions are simply carried out without any written agreement or formal paperwork; hence it can further make things complicated.

 

Author Bio: Victoria Anderson is a finance writer for Guarantor loans. Loves to write about social media, technology and banking.

Post By Praveen Rajarao (469 Posts)

Praveen Rajarao is a Software Tech Lead and in his spare time blogs on his website –http://www.dailymorningcoffee.com and http://www.techivy.com. His topics range from blogging to technology to affiliate programs and making money online and how-to guides. Daily Morning Coffee is also accepting Guest Posts from Professional Bloggers at this time, take a look at “Write For DMC” page for more details on the same.

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1 Response to " Finance a technology business: Cheapest ways "

  1. Chris says:

    It’s definitely difficult to get business credit early on. However if you’re methodical about it, you can start to get some business credit history and then a potential loan over 6 months to a year…
    Start with vendor accounts (Staples etc) and make sure they report payments to D&B.
    In the meantime only personal credit will be available I’m afraid.
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