Starting an enterprise always requires money

In the early stages of a business, money is needed to start up operations and make initial investments. The amount of funding needed depends on your business idea and varies greatly between industries. Sometimes the needed amount is some thousands, and sometimes it is closer to hundreds of thousands.

The easiest way to work out your financing needs and sources of funding is to perform a financing calculation when drawing up your business plan.

In most cases, initial funding comes from three sources:

  1. the entrepreneur’s own financing
  2. loans
  3. possible grants

Self-financing refers to investing your own savings or other assets (property given as a capital contribution, such as machinery, real property or car, into the business.

Loans (liabilities or borrowed capital) are granted by banks, pension insurance companies and other financial institutions, such as Finnvera. Start-ups can also turn to business angels or venture capitalists for funding to get their operations started.

A start-up grant, however, is not an allowance for companies but it is meant to support your livelihood in the start of business operations.