Business financing

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Loans vs investment

Q. I need to raise £20,000 to get my business off the ground and have been advised to go down the bank loan route as opposed to giving up equity. Is it better to stick with loans for relatively low amounts of investment, or would an angel or private equity firm have more to offer?

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Without enough proper business financing, your new business will not be able to buy stock, rent premises, advertise or take on staff. Many people need to raise business financing to fund their new venture. The vast majority of startups turn to their bank for funding, but there are several other ways to raise the money you need . There are three main types of funding—loans, share capital (from a venture capitalist, business angel, or friends and family), and grants. The channel takes you to more information on the business financing options available to help you decide which is the best one to suit your needs.

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