Funds are required at the early stages of micro, small and medium firms. But newly graduates or unemployed persons do not have that many funds to support firms. In this scenario what is your opinion, from where funds can be acquired?
In the UK, I have started several small business with limited funds. The most usual route, and the route I first followed. is typically know as "friends and family". A friend of mine loaned me, at no interest, just enough to buy a computer so that I could start my first company. Later, my next company involved the same friend, but by this time I had an accountant, and he put me in touch with a friend of his. Since those days, crowdfunding has become a 'thing'. But, depending on how much is being sought, it can be hard work. I did a crowdfunding raise of over £120,000 from scratch with no seed; it took over 6 months planning and the raise lasted for three months. The ability to reach out socially through multiple networks is high. Banks are a route for debt financing, but to be avoided where possible. In the UK, there are some government-backed debt facilities, and some grant opportunities, but will generally require some match funding. Ultimately it will still come down to having a product or service that someone can see a value in. It is up to the business founder to network to find that someone.
There are Government guaranteed lending schemes, and the equity could be a way out.
Kindly visit..
https://www.worldbank.org/en/topic/smefinance
Check https://www.worldbank.org/en/topic/smefinancehttps://www.worldbank.org/en/topic/smefinance
https://www.worldbank.org/en/results/2013/04/05/msme-finance-expanding-opportunities-and-creating-jobs
Also check https://innovation-entrepreneurship.springeropen.com/articles/10.1186/s13731-019-0110-2
https://www.oecd.org/mena/competitiveness/47256350.pdf
Money is there. The youth can approach his teacher and ask for say 10 dollars to buy two chicken or any business and promise to return the money as soon as possible. Where there is a will, there is away. The problem is that we think of big amount of money, Small businesses is about starting small.
Simply, the way to finance micro, small, and medium-sized companies is through their own capital or from third parties. Initially, they do not have funds, and they have to manage the financing, whether from family members, financial entities, or others.
In my opinion, Micro, Small and Medium enterprises (MSMEs) shall start with their own money/equity. Starting a business with borrowed fund will cause increase in operating expenses as borrowing will always entail cost. Lack of capital is one of the hindrances for MSMEs' growth, hence, the government should provide financial assistance through soft loans with very minimal cost. Once the MSMEs become self-sufficient, they shall return/pay the loans.
for small companies, municipal savings banks, state financial entities, medium-sized ones, banks, for large ones, owned by shareholders and third parties due to indebtedness of liabilities.
nowadays there are platform for raising capital (peer-to-peer lending). maybe those MSME can go for these kind of fintech platform. IDK in Bahrain but in Malaysia there are many these kind platform i.e Fundaztic, Alix Co, CapBay, CapSphere, CrowdSense, QuicKash, MyPF.my, Microleap etc.
The Philippine Government invests both financial and technical support to MSMEs. The Department of Trade and Industry (DTI) is the major player in catering to the needs of the MSMEs specially the star-ups. There are loan windows available for them. They (MSMs) are given the opportunity to borrow capital to finance their operation and equipment.
In summary, micro-entrepreneurs can finance themselves through their own sources and third-party sources, that is, get into debt.
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