Finance your business

5 ways to finance your business from your own pocket

The Kenya interest rate cap still has the banks sulking and refusing to finance businesses. If you are one of the entrepreneurs who are affected, by this credit crunch, you can still find ways to raise some money from your own pocket in 5 smart ways.

1.Savings
This is that balding but reliable husband of yours. Your savings have the limitations of not being enough or eventually running out. But they are there for emergencies. Your business being short of working capital is an emergency since it’s one of the reasons your business may fail. You could also use your savings to start a business but ensure you have a tight plan for the money.

2.Cash Advance
Entrepreneurs in Kenya have access to a new financing tool called Merchant Cash Advance. It’s real time like social media feedback. And unlike a bank loan, the processing is fast. You simply repay the lender when your debtors pay you back. Or you pay back through a percentage of sales. By the way, here is how to increase earnings in service business. If you have a business with short money cycles like retail then you want to take advantage of this financing avenue.

3.Retirement Savings
The size of retirement savings in Kenya will soon hit sh.1 trillion. That’s a lot of money considering a Kenyan lives for only 63 years. I am only trying to suggest that you consider your pension as a tool to finance business since some private pension funds allow for early withdrawals. This is also a viable option for those who have opted to start business at later ages.

4.Severance pay
Kenyans who are losing their jobs need not be so glum. Put your severance pay into that side-business that divided your attention and got you sacked. If you paid your dues but still got dismissed, you have a chance to restart as late as it may be. You can use the money to start a business. Here are some business ideas for you and some for you and your spouse.

5.Cut your lifestyle
If you are a woman entrepreneur, then you have your work cut out for you. A proverb goes, ‘women cannot go backwards in lifestyle’. Also, Kenyans have poor saving habits. So take this as a challenge to save money for your business. No, you do not deserve that pampering for how hard you work. Atleast not yet. It doesn’t just mean that you spend less but you can also sell off things you don’t need.

Are there more ways to raise money from your own pocket? Please share with us on the comment section below. Don’t forget to subscribe to our email newsletter.