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4 tips on raising funds for your startup

Borrowing money should be the last option, an entrepreneur says.
By Carlo P. Mallo |

While most Filipinos dream of becoming an entrepreneur, these same Filipinos worry about raising capital for their dream business.


Putting up a business requires capital. But where do aspiring entrepreneurs look for it? There are banks offering loans, then there\\\'s  the popular "5-6" loan, which imposes a 20 percent interest rate, and there are other possible sources of capital too. But if you choose the wrong loan or source your capital from the wrong hands, your startup is already in trouble.

Roy Garcia, an entrepreneur from Davao who has put up 10 branches of   Mobile Networks - a retailer of mobile gadgets-  in Metro Manila, noted that raising funds for your business is easy, as long as you know where to find it and how to do it. Garcia said there are a number of options available to aspiring entrepreneurs for their funding needs:

1. Savings

 There is no better source of capital than your own savings. Unlike borrowing, savings do not impose collateral and interest rates. There are also no paper works and tedious bank processes to deal with if you use your own savings.


2. Loan

 If your savings are not enough, there are banking institutions that are ready to extend a credit line for entrepreneurs. Just make sure that the loans have friendly terms. “If you are borrowing money, do not use short-term credit. You should give leeway on the time to repay the  loan as a business\\\' performance  is unpredictable,” Garcia said.

3. Re-invest

“As much as possible, reinvest all your earnings from the business to keep it stable and enhance its finances,” Garcia said.

4. Earn

"In investing in a business, you must only keep your investments on the same level with how much you hope to earn. Do not invest more than what you hope to earn. Otherwise it becomes a charity,” Garcia said. One last tip: “If you can avoid borrowing, avoid it. It helps you to get to sleep more peacefully at night,” Garcia added.

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