Having a great idea is the starting point for any project. Unfortunately, a great idea is not enough by itself. You need to know there is a market for your idea, and that people need it. Of course, this doesn’t apply if your project is a personal one and not for resale.
But, you will need to prepare a plan for the project, calculate the likely costs of creating and finishing the project, work out an approximate timescale, and even know how you’ll repay the funds that you’ll probably need.
That’s the real crux, you’ll probably need finance for your project and that means finding the right development finance partners and convincing them that your project is worth financing.
Fortunately, there are several ways of obtaining the finance you need, depending on the project you have in mind.
Mainstream Banks
This is the most logical first step as you’ve probably had an account with your bank for many years. They’ll know you and may be able to offer you the funds you need.
However, mainstream banks tend to be conservative, this means that they’ll fund you for easily defined projects, such as a business loan. But they’re unlikely to fund you to build a house or research a new product.
Specialist Lenders
The development finance partners mentioned above are a great example of an independent approach to finance. They’ll assess your needs and your ability to repay, regardless of the project type. This makes it easier to get the necessary funds, although you’ll have to ensure you’re aware of and stick to, the prescribed repayment terms.
This type of lender can help with almost any project but they are especially good if you’re considering building your own home.
Crowdfunding
Another option that has grown in popularity in recent years is crowdfunding. For this, you’ll need to create a website that tells everyone what your idea is and how it needs to be funded. The traditional approach is to patent your idea first and then give investors a healthy discount off the finished project. Of course, they’ll have to part with their cash now in order for you to finish developing the product.
Grants
Depending on what your project is trying to achieve, you may be eligible for a grant. That’s effectively free money but you will need to meet their strict criteria and use the funds appropriately. The firm or government you are applying for th grant off may use free grant tracking software to monitor your application. This can make the process of applying easier.
Grants are commonly available for research projects, things that benefit local communities, and environmental initiatives. You’ll need to check with your local state what grants may be available depending on what project you have in mind. But, remember that it can take a long time to get the funds approved and released. You’ll need to factor that into your project timeline.
Private Lenders
If the project is relatively small and you have some funds of your own you may be able to secure the extra funds through private money lenders.
This is generally family and friends who are prepared to lend you a small amount each to help get your project off the ground.
However, make sure you have a proper contract drawn up and you both adhere to it. If you don’t you can damage your relationship permanently.