Investments and finance are an essential part of any business where in the scope for expanding an improvement is possible only when there is enough capital to expand. There are various sources of finance that can be utilised to expand the business. In jewellery design and manufacture, unexplored avenues include exporting, importing and improvising on the manufacturing design. All such avenues may be better improvised with finance and capital investments made in the jewellery industry. Following is a brief of the various sources of finances that may be used as recommended by GemAtlas.
Finance – Business to business
A business that is already running smooth and making enough profits may wish to expand and may become the sources of finance for business. Such a company may acquire a smaller company or merge with an existing company that has brand equity and seek the finance that is needed to expand and makes space in the global markets.
Another way to ensure safe and regularised business start-up finance would be to Sign a Consolidated agreement for services against the investment that another company would make in the business.
Finance – Governmental and Loans
While there are many business finance types, the most suitable for the small and medium sized enterprises is the Business loans. There are public and private companies including national banks that would evaluate the worth of a business and then give an allowance or a bank loan to expand the business as per the proposal that has been submitted. Banks and other lending organizations would also be able to sanction the loan only after an analysis has been conducted.
Another majorly used option is the personal loan where in the business owner would wish to seek investment and loans through personal contacts in return of an interest paid or a stake holding the in the company.
While loans and offers are many, there are various threats and risks associated with such a decision as well. The biggest threat that merging with a company on a contractual time against some amount of money that has beenlent, can cause the lending company to take over the business and merge it.
Secondly, business loans that are offered by banks are time bound and have high rates of interest that have to be paid along with a principal amount of money that has been taken. In addition to this, any deviation from he planned repayment plan would attract a large sum of fine and penalty which is further an expense for the investment.
Thirdly, the personal investments that are made would amount to the stake holding in the company being bifurcated such that the original share of the company keeps getting reduced.
It is also important to ensure that the plan for seeking finance and the way it has to be utilised is well drafted before the plan in implemented. Any amount of money that is being brought in would have to be audited with accuracy as well.