Seven laws of securing business capital

    

               1. DEFINE THE CAPITAL  

The capital you will use to start a business would vary from the one you will use to start another. Different business requires different capital to start. Business vary in size, structure and operation, and thus requires different capital to establish. The capital you will use to start a small photography business differs from the one you will use to start a large business like a production company. 

You need to have in mind how much capital you will need to start the particular business you have in mind. This is important so that you will have a target. When you are certain as to capital you will now work towards realizing it. You will reflect your targeted capital on your business plan. Then work towards securement of it. But if you have no specific amount in mind, then you lack target. When you start sourcing for capital you may not realize much as you require. You could realize less, since you do not have a targeted capital.

If you want to derive your capital from a source other than you, you will have to present them with your target; a specific amount that you require. It is that amount that they will give you. It when you do not give them a target, how could they know how much you require to start a business?

Defining the capital you want will help you to know the step you will take to secure capital. Different amount of capital will require different steps to secure. Suppose you want to stasmall business that requires small amount of money, you may simply take the steps of drawing it from your purse. But if it is a very large business requiring large amount of money and you are not rich enough to draw capital from your purse, you may have to, from an external source. Securing from an external source will require a different step from your purse. So having a target will now influence the step you will take.

There is no conventional capital for business establishment. Some have started business with little amount while others with more.

Since there is no conventional capital for starting business, you will need to weigh the business that you want to start, to determine the capital that would be sufficient for it. Then when you do, include it in your plan. So that you will think about how to secure it. 

                 2. CHOOSE A SOURCE

Capital isn't inherent. It has to be sourced. Since it doesn't come naturally, it has to be sourced.

Different men have sourced capital through different ways, implying that there are different ways of sourcing capital. 

Capital is defined as the original money or resources used to start a business. So, we can source capital through the very means that we can draw money. 

You cannot choose to draw capital through all of those means at the same time. Traditionally men acquire Capital through one of those means. There would be no need to source from multiplayer sources at the same time, if one source can give you enough you require. 

          3. HAVE A COLLATERAL 

Most times people do not draw capital from their purse. They may choose to start large scale business which requires huge Capital which they lack. So, they try to draw it from other sources. One of those major sources is through loaners. Loaners borrow them money to start business, on the term of payment of interest, and they use it to do so. But this does not come easily. Those who collect loan use it to start business. They make profit from the business and repay. But not all are always lucky. Some are unfortunate they do not realize profit to repay. They lack turn-over which makes it difficult for them to draw profit and repay the loan. 

Loaners know this could happen. Nothing ever guarantees success. No matter how wisely one pursues business he could fail. So they usually request for a collateral. Collaterals are usually items of equivalent value with the loan, owned by the collector, which he agrees to bequeath the giver of the loan, in the event of his inability to repay, so that it could compensate for the loan. It could be anything at all, having any form. But it has to have a value that would match the capital so that it can be able to replace it in the event of inability. This helps to ensure that the loaner does not lose. Loan giving to him is a trade. He indulges in it to make money, trading capital for the interest the collector would give him. So if the collector did not repay the money, he loses. He gains only if he pays. Collaterals helps to tackle the inability of the collector to repay in the event of lack of actualization of profit. It would now be taken from him and used to settle his loan. 

Those who lacks collateral are never considered for loan. Collaterals are the guarantee that the loaner can repay his money. Only those who possess collateral are given loan. So you ought to ensure that you have a collateral which you would present to those you would seek loan from on their demand, assuring then that they would get replacement of their money, boosting your chances of securing it. 

     4. SEEK FROM DIFFERENT SOURCES 

There are many that are engaged in the job of giving capital for those aspiring to start business. Each of those organizations receive countless appeal from people on a daily bases for loan. The people that applies to a certain organization are always too many, they cannot consider all of them. It is not even possible if they possess the money to do so, for not all that applied would be qualified to get the loan. So if the organization that you applied to, has many applicants, they may choose to grant only few, as much as they can. You may not be among them, though you eagerly hope to, and qualify for it. 

They have the right to reject you, so you cannot take any legal action on them. You may only be sad. If they reject you, you will have the option of either seeking the loan through other agents or quiting. You will not want to quit, you want to start a business and requires capital. So you would explore other source. 

If you are wise, your failure would teach you a lesson. You will learn from it that another particular loaner may reject you. So the wise thing to do, is to appeal to as many as possible. So that if this one does not favour you the other would. 

All of them will not have the exact amount of applicants. Some will have less, and likely grant you. 

       5. PLAY THE ROLE OF A SEEKER

If you desire to own an item, you will take steps to secure it's ownership. If this item is available at a store, you will leave home for it, and buy it there. If you do not take steps you may never get it. Nothing ever comes by chance. Our possessions are the results of our efforts. When we take the steps that leads to something we will attain it. 

A capital is very much like an item at a store. You will need to exert efforts to secure it. It will not leave it's store and locate you. 

For instance those who give capital as loan, will not locate you at home. If they locate you, they make theirselves both the seeker and giver of loan, and they can never play the role of a seeker. It is you that is seeking. It is like being thirsty. You have to ask for water from someone who has it to show him you want it. You are the one that has to meet them for loan. It is a sign that you seek it. Except you do they cannot read your mind and discover you desire it and give you. When you do not indulge in the step required to acquire loan, you would continue to be in your state, wishing and wishing to acquire capital without doing so. If planning is never done, void of capital, there would be voidance of the route to capital. It is through planning which involves critical assessment of the routes, to capital, that the best method can be singled out. As the seeker, you must indulge in this role which your role consists of. If you never plan, no one would for you, so you should.

A letter is traditionally the way to indicate that you want a loan. Write to whatever organization that is involved in loaning. When they receive your letter, they will know you want a letter. That is how everyone else who wants loan seeks it. If you do not want loan you would t write to them begging for it.

State clearly what you want to do with the loan. State to them how you intend to pay so that they would know you are capable.

Immerse yourself in the steps required to secure loan, which includes planing and seeking and you would acquire it. 

   6. HAVE A RECORD OF REPAYMENT 

After receiving a letter of your appeal, the organization does not just grant you loan immediately. They make considerations. One of the focus of the consideration would be on your qualification. Simply because you promise to repay does not mean you will. Some have made promises in the past that they did not fulfil. They have learnt this from experience. This may be due to the fact that it is consistent with the psychology of those that refuse to pay not to repay loans. 

For such ones, if they are given loan, they would still refuse to pay, even when they are able to. The organization usually does not give such people loan. It is because they know they would not repay, making it difficult for them to realize their money leading to loss on their part. 

So when you send an application letter for loan, the organization carries out a research to ascertain if you have a record of repaying loans. If you are loyal in this regard, they would grant you, but if you are not, they will not. 

It is always better for you to have the habit of repaying loans that you borrow. But if in the case you are inadequate in this regards you should conceal your weakness. Then unaware, the organization would consider you loyal, and have no inhibitions with granting you loan.