Whether you’ve been in business a day or for several years, the need to source for fund to enhance the growth of your business is an indispensable one. There is money out there of course, the key is knowing where to source for it. Perhaps you have practical business ideas, development plans and other projects that will increase the productivity of your business, but lacks the funds to actualize your dreams. Choosing the right sources of capital is a decision that will influence your business for a life time, these situation often presents challenges for entrepreneurs, because the company’s strength and weaknesses lies on it.
Be thorough before approaching lenders and investors, however, applying the following tips in no exact order will be of great benefit to you, if you are in the process of raising finance for your business.

Bootstrapping
This is the process of funding your start up through your own savings. It requires strategic thinking and planning. Funding from your savings is always beneficial. If you find a way to finance your business yourself, you are not indebted or answerable to any investor, and you have total control of your business. It puts less pressure on you as an entrepreneur. Even if the business failed, there will be no litigation as the money was raised from your past savings or assets. The important thing is that, there is no commitment of repayment involved. Be sure you have a good business plan before pledging your assets. Don’t do it casually.
Friends and Family

One of the most effective ways to fund a business is through family and friends, it remains the best source. Borrowing money from the people you’re close to in life has been the longest-standing method of funding entrepreneurial endeavors. Many people are skeptical about this  because  it may fail. The fear of damaging relationships, keeping to your part of the deal under all circumstances and borrowing from individuals who are in a position to lend without risking their own financial health, will be of great benefit. There are basically little or no interest involved regarding your credit and their expected return on investment. The best way to find them is through phone and social networks or personal contact. Start calling.

Retirement Funds

Just as the name implies, you might consider using your retirement fund, you can even combine money from your retirement with loans, friends and family and other funding methods for greater flexibility in your business endeavors

Loans

This is a facility given to the entrepreneur with obligation to pay certain amount and accrued interest at an agreed date. It comes in all shapes and sizes. From the financial institutions involved, it could be private source, micro-finance houses offered by local community banks or by Major commercial banks. These kind of loans are much easier to obtain, especially when it is backed up by assets or third-party guarantors. This is actually not the best source of financing for new business, because the payment put pressure on you and your business. If you obtain a line of credit rather than a fixed-amount loan, you don’t start paying interest until you actually spend the money. Where it could not be totally avoided, apply caution when taking it. with respect to loans, there are lots of options available for you to raise capital. And all the above have differences

Government fund
To be socially responsible to its citizenry, the government of a country sometimes maps out a certain amount of money to encourage the development of small and medium scale enterprises. This money is given out as grants to those it may concern. Governments grants can be a source of fund for you, if you are a citizen of that region and you are able to fulfill the stipulated requirements. The government can also help you point toward many different funding sources as well as offer assistance with the legal and administrative aspects of starting your business.

 Loans Available to an Entrepreneur
1. Short term loan: These are loans with a repayment period of about 6 months or less. micro finance banks  and venture capitalist are know to be in front line when it comes to this form of loan and often attract high interest

2. Medium term loan: just as the name implies is loan with a payment duration of one year, this kind of loan is not in the best interest of the lender because, they need fund to finance their business, and is being granted by commercial and micro finance bank. No business owner will want anything that will slow the smooth running of his business.
3. Long term loan: This type of loan is granted by Bank of industry and other specialized banks, with a repayable duration of two years. This kind of loan is no go area for small scale business owner, because of it’s strict in nature . It’s often recommended for capital project.

The most important thing to note is that whichever loan you intend to source for, it’s prudent  you start planning on time on how to service your loans.