Finding Money In Numerous Varieties Of Financial Funds

Everyone is familiar with loans and credit, but in the business world

, those only get one so far. While taking out a loan may be great for purchasing that new house and that credit card may be useful for making a payment on the lease for that car, what about a new business or the new large scale housing development? How about making that multimillion dollar movie, surely the bank didn't loan them the money? Every project and business is different and there are different types of financial funds that best fit each. While loans and credit may be good for personal and small business purchases, sponsors and investors can fund projects and companies that require a little more money. For large scale projects and businesses that require a lot of funding, angel investors and hedge funds may be what they are looking for.

Three important questions must be asked when determining what type of financing one is looking for: Are the funds for personal or business? Will it make money and how much will it make? How much money is required? By answering these questions one can determine exactly what type of funds will best suite them. If the money will be for personal use, there is no need to ask any more questions, a loan or credit are the best solutions. If the money will be used for business purposes though and it will make money, then investors and hedge funds will best be able to help. If the business venture will not yield a lot of profit, or any profit, then getting other businesses to sponsor one's business, project or event would be the most successful path as exposure of some kind is usually the trade off for a sponsorship. For businesses that will make a profit on the investment, a choice still has to be made on the type of investor or a hedge fund. For smaller capital investments, a typical investor will be able to handle it, but a larger investment will be better handled by an angel investor or a hedge fund.

Personal purchases almost never produce profit or offer others exposure since they are self serving purchases. With this in mind, getting credit or a loan is the only responsible way to go about getting the needed money. There are different types of loans available and the most common is a personal guarantee loan. These are based on credit checks to ensure that the applicant has a good history with paying bills and debts on time and on a regular basis. Obtaining credit is done in the same fashion. For higher loans, assets may be required in case the loan is not paid back in full. Houses and cars are usually used in these cases. Higher loans of this type can also be obtained for small businesses that do not require a lot of start up capital.

For businesses, events and projects that may not make enough profit to interest an investor, sponsors can help by making a contribution and, in return, getting exposure. In some cases an agreement may be made that a sponsor will get a cash donation or a certain percentage back but that is typically not the case. The advantage with sponsorships over other methods is that there is room for unlimited creativity with what the sponsor will get back in exchange for their money.

Ventures that are likely to make a significant amount of money will tend to attract different types of investors. However an idea alone will not be enough to get an investment, a solid and well written business plan with facts and figures justifying the investment will be required. However it is important to look at the amount of money that is needed, as a normal investor may not be able to provide the amount needed, in which case it may be wise to look into finding multiple investors or an angel investor. Angel investors have ever growing investment portfolios with businesses and projects that match their interest but in order to attract an angel investor, the return on investment must be fairly high.

Certain ventures may require investment by a hedge fund. This is a group of investors who have pooled their money together to fund both large and high risk projects. The advantage of this group is that it is not just one person shouldering the risk but multiple people.

Before starting to search for funds, determining the category that the project, business, or event best financially fits into is an important step. These types of financial funds are the most typical and almost all ventures can be placed into one of these categories. They all have their own pros and cons but are essential to helping individuals realize their visions.

by: Bill Underwooda.

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