Funding – it’s the one thing on every SME, start-up and entrepreneurs mind as they attempt to bring their dream to market. Here, ProfitShare Partners offers a brief list of pitfalls that new businesses should look out for when seeking financial solutions.
Effective business plan: Before you begin looking for funding, create a clear and concise plan for how you’ll use funding to grow your business. Lenders and investors want figures and facts that show their money will be put to good use and that your business has a robust chance of success.
High interest rates: Beware loans with excessively high interest rates. While they may offer a quick solution, they can become a massive burden on your business over time, making it difficult to repay the loan and denting your profits.
Hidden fees: Look out for additional fees that aren’t immediately obvious before you sign any paperwork. These fees can add up and surprise you later, affecting your budget and making it harder to manage your finances as you pay amounts you weren’t clear on at the start.
Over-borrowing: It’s tempting to borrow more money than you need, thinking it will give your business a boost, but bear in mind that you are legally obliged to repay everything you borrow, within the specified time frame – and with interest. Only borrow what you truly need to avoid unnecessary debt and high costs in the long run.
Questionable lenders: Not all lenders or investors have the best intentions. Some may promise a lot but not follow through, leaving your business in a worse situation. Make sure you research investors or lending institutions, and only work with reputable individuals or facilities that have a track record of helping businesses like yours.
Getting your funding ducks in a row is a vital step on the path to success – but it’s crucial that you take this step carefully and with a solid understanding of the terms and potential risks.
ProfitShare Partners always suggests that SME owners or entrepreneurs consult with a financial advisor or mentor who can guide you through the process. A misstep at this stage of your journey can affect your business sometime down the line.
Remember, if you have a purchase order or contract from a credible entity within the private or public sector, our Fintech company PSP gives you access to finance swiftly and with the full support of our team.
Visit https://profitsharepartners.com/ now to see how we can help you avoid the pitfalls of promised finance, and get your business on the road rapidly.
