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How to Secure Financing for Your First Business Project
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How to Secure Financing for Your First Business Project

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April 19, 2022

Former Editor of Startups Magazine (2019-2022) Anna Flockett, is a Journalism…

A lot of businesses fall apart at this stage when they have to arrange financial help because of the overwhelming responsibility that comes along with the process. Luckily, you have stumbled upon the perfect guide to help you with some smart ways to find the right financial help for your business. Whether you are a seasoned business owner or a millennial just stepping into the business arena, the tips below will help jumpstart your venture to secure funds for your business. 

Get an Idea of Where You Stand

This is important because as a business startup you need to be ready to invest in your business by all means. But a general rule of thumb is to invest whatever you are able to lose at that time. This is because when your business is just starting out, it is possible that you may suffer some losses and this may create a burden for you financially. To evaluate this comprehensively, you need to do an audit that evaluates your debts and assets. After this, you can set aside a certain portion from your savings that you can invest in your business. Although this audit or financial evaluation seems quite simple and obvious, a lot of business startups begin without having this clarity and fall prey to the financial upheaval that ensues. 

Seek Out the Perfect Lenders

You can’t simply hope to step out in the market and see lenders swarming around your business like a beehive to lend you financial help. It would be your job to seek out the right lenders that fit and complement your business model. There are various options available when seeking a loan for business but you have to be specific about the type of loan that your business requires. For instance, there are different loan opportunities for veterans and women entrepreneurs. You can look into government loans or available grants for supporting startups because these are some of the options that are offering loans or financial assistance at a competitively low-interest rate. There are also several loan options that offer collateral-free loans for startups. Before you actually apply for a loan, it is important to try to build a good rapport with the potential lender. 

Seek Support from Family or Friends

Entrepreneurship is like doing a short course in humility because as an entrepreneur, you have to use your “people skills” for assessing the sources from which you can seek financial help. One of the most obvious sources is turning to your loved ones who can afford to contribute and this can be especially helpful during the beginning of your startup. However, if this is something that may cause significant friction in your relationships, then you can instead consider seeking loans from external lenders. 

See Also
When global labour market data is released, headlines tend to fixate on a single metric: unemployment. This year is no different. According to the latest figures from the United Nations and the International Labour Organisation, global unemployment remains relatively stable at just under five per cent. At face value, this suggests a labour market that is holding firm despite economic uncertainty, geopolitical instability and technological upheaval. In reality, it masks a serious and underreported problem: the true global jobs crisis is not a lack of work, but the growing scale of informal work. More than 2.1 billion people worldwide are employed in the informal economy, including misclassified workers operating outside effective regulatory coverage, where employment is typically unregistered, contracts are absent or unenforced, and access to labour rights and social protections is limited or non-existent. That represents a large portion of the global workforce. If unemployment reveals how many people cannot find work, informality shows how many are working without protection or long-term opportunity. Informal work is often associated with developing economies or unregulated sectors. However, this form of work is increasingly occurring within developed economies and regulated sectors, hidden within otherwise legitimate, fast-growing small and medium-sized enterprises – and this is often unintentional. For both businesses operating solely in domestic markets and those that have expanded abroad, adopting new workforce models and attempting to respond to rapid technological change, the crisis of informality is emerging in three key areas. The first is worker misclassification. Individuals are engaged as independent contractors but operate in practice like employees – working fulltime, at set hours, for years at a time. This is particularly prevalent in gig and platform-based roles, where algorithms determine pay, hours and performance without considering employment rights. Gig and platform work often presents as flexible and empowering, however, in practice, many platforms exercise employer-like control over payment, performance management, hours, and length of engagement, while explicitly avoiding employer obligations such as tax filings and the provision of statutory benefits like annual leave and healthcare. The result is a growing cohort of workers who fall between legal categories, carrying the risks of self-employment without the autonomy or protections that should accompany this mode of work. The second area is cross-border remote work, where informality can inadvertently arise. With post-COVID remote working models here to stay, companies are directly hiring overseas talent, assuming that because the worker is not based in the company’s home country, local employment laws do not apply. Where employment is not properly registered (whether by the employer and/or employee), local labour law is not applied, or social security obligations are misunderstood or ignored, these arrangements can slip into a form of modern informality, even where the relationship appears to be formal on the surface. This is often the point at which organisations begin to seek external guidance. In many cases, neither party fully understands the legal implications of the arrangement, which leaves both employer and worker exposed. We frequently see organisations approach us when a specific issue surfaces, such as payroll inconsistencies, questions around benefits entitlement, or concerns raised by the workers themselves, including registration process failures. Business leaders should also be aware that permanent establishment risk can arise if a remote employee is deemed to represent the company locally, which can trigger corporate tax obligations. Social security errors can happen when contributions are not made correctly in either jurisdiction, leaving workers without coverage and employers facing backdated liabilities. Meanwhile, employment law conflicts can emerge when contracts fail to meet the requirements of the host country regarding notice periods, benefits or termination rights. The third driver of informality is structural. These arrangements are becoming more common as artificial intelligence and evolving workforce models outpace regulation. Businesses are innovating at speed, but legal frameworks are struggling to keep pace. The UK’s Employment Rights Act offers a clear case study of the direction of travel. Worker protections are expanding, classification rules are tightening and enforcement is becoming more coordinated across agencies. Informal arrangements that once sat in legal grey areas are moving firmly into view and what was previously tolerated is falling under scrutiny. The challenge is that informality is rarely a deliberate choice. For many growing organisations, it becomes the default because compliant pathways are complicated and difficult to navigate alone, particularly across multiple jurisdictions. Legal advice, payroll, tax, HR, and immigration compliance are often siloed, leaving gaps that businesses may not even realise exist until a problem arises. For instance, digital nomad visas are often viewed as providing holders with wholly compliant right to work status, however employers may not realise that this is not always the case and contracts may not reflect the correct legal status or entitlements. Addressing informality requires a change in how we think about employment at a global level and recognising that flexibility and compliance are not mutually exclusive. Businesses need models that allow them to access global talent quickly while ensuring workers are properly employed and protected under local law. As attention remains fixed on unemployment figures, informality continues to expand beneath the surface. It is this hidden cohort of workers, contributing economically without security or rights, that represents the real crisis in the global labour market. Solving it will require coordinated action from policymakers and businesses alike, and a commitment to building workforce models that are not only innovative, but sustainable and fair.
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In general, you should cover all the options that are available for securing a loan for your business. From assessing where your business stands to external loan sources to checking in with your close relationships, you should explore all the possibilities. 

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