Business Investment Finance
In investment decision for businesses, the managers determine the investment value of the assets that a business enterprise possesses. The assets can be physical, intangible or financial. The financial assets in business investment finance are often marketable securities such as bonds or a company stock. Assets are used to produce revenue that is often associated with particular outflows or costs. In all, the manager must determine whether the net present value of the investment to the enterprise is positive, using the marginal cost of capital that is associated with the particular area of business. At times the goal of business investment finance is for producing future cash flows, while at others it may be for gaining access to more assets by establishing control over the operation of a second company.
In case there is a lot of money going in and out of business, the investment firms are usually in the front, when it comes to investing that kind of cash for business investment finance. There are many financial investment firms that specialize in various business investment finance activities including equity trading, bonds, stock markets and much more. Knowing the type of business investment finance options you want to explore, you can choose an investment firm. The costs and pricing of the investment firms depend on many factors, some of which are mentioned below:
1) Sign up with online investment firms to save money and time
- How customized is your service?
- Whether you work with online investment firms or regular firms.
- They type of services you are looking for.
Online business investment finance firms can do the same things that a normal business investment finance firm without an online presence would do, but here you would get the convenience of contacting your investment brokerage when ever you want or checking your account anytime of the day. There are many online services, and you can sign up for a monthly or yearly membership fee of 8 to 33 pounds a month.
‘Investment Pioneer’ offers information on how to compare online business investment finance firms to best meet your needs.
‘Firstrade’ is another online business investment finance firm where you can manage stocks, retirement and education accounts, bonds etc.
Most people in search of investment firms for their business finance investment are looking because they have money to invest. Whether you have personal money, retirement account money or business funds to invest for your business finance investment or you have money or investments at another firm that you are not quiet satisfied with, then you can look for the following key deciding factors:
- How much money are you planning on investing for your business finance investment. Say, if you are beginning with a few thousand pounds, then you can, for example, reach to one of the major mutual fund investment firms.
- Are you looking for personalized help, either by phone or you can visit a location nearby? There are full service investment firms that offer personalized service and financial planning advice for your business finance investment, while people who are comfortable to mange their own investments generally opt for discounted investment firms.
If you are looking to start your own business then the success of your business depends upon your ability to secure adequate financing. Knowing where to look for funding for business investment finance is the first step to accessing capital; being prepared to convince the investors for funds is the next.
1) Take stock of your personal finances
The primary source for getting loans for business finance investment is personal finances. Many experts say however, this is the riskiest financing option, because you are putting up your own collateral to finance your business. Other options such as tapping in to personal savings or credit card loans are equally risky.
2) Be Ready
Whether you decide to self-finance for the business finance investment or get a loan from outside, check that your personal credit history is in the right shape with a credit report from TransUnion, Equifax or Experian.
No matter where you turn for your funds for the business finance investment, you will need to provide a solid documentation that your business concept is sound. To get loan or funds for your business finance investment, have a convincing business plan ready, as well as be prepared with cash flow projections, tax returns and personal financial statements. With the right materials with you, you can convince the investors and lenders for a loan for the business finance investment and assure them that you can repay the loan.
3) Friends and Family
If you get your business finance investment from family or friends then it would be a boon because it may be interest free or have a low interest. Requests for a loan of a business finance investment should be professionally presented and include detailed financial projections. Draft a promissory note if you are getting your loan for you business finance investment from your loved ones so that interest payments are clearly detailed. Be prepared that if a business fails, it could damage personal relationships with investors.
4) Get through banks or credit unions
If you can show that your business proposal is strong, you may be able to land a loan for your business finance investment from the credit union or your bank. These kinds of loans are issued in many types, with varying interests and maturity dates. Most of these loans for a business finance investment are secured against hard assets such as equipment or real estate.
5) Search for angel investors for business finance investment
Before heading a bank for a loan for the business finance investment, it is advised to visit your local Small Business Development Center. They will advise you on how to make your presentation to bankers.
Angel investors are groups or individuals that provide capital for the business finance investment, often in exchange for ownership equity. More money is invested each year through angel investments than through venture capital financing.
6) Consider venture capital
Venture capitalists fund new start ups and look to make large business finance investments, typically over $1 million.
7) Apply for an SBA loan for a business finance investment
Big organizations like Apple and Nike got a kick start with SBA equity loans for their business finance investment. In reality, the money actually does not come from the SBA; but comes from the banks participating in it. What the SBA does is that is merely guarantees the loan amount which helps the entrepreneurs who are just about starting their business venture and who might not normally qualify for a loan for their business finance investment.
Venture Giant is a leading Angel Investment and networking portal which connects active angel investors with entrepreneurs who seek investment capital and business funding to start up new ventures or expand existing businesses. Venture Giant can get you the early stage, seed investment capital or business financing to start your business, launch new products or business service.