In many ways, higher education remains one of the very best breeding grounds for business ideas and start-ups.
In fact, a recent Santander Universities UK report revealed that around 24% of students in higher education are currently running a business venture of some sort, highlighting the entrepreneurial spirit that has gripped younger Millennials in the modern age.
In this post, we’ll look at how students can fund their business ventures in 2018, and appraise which offers the best growth path.
- Consider Invoice Financing
If you’re a student, it’s important that you’re able to launch a relatively low-cost business that does not incur long-term debt. After all, you’re unlikely to have a huge amount of capital in reserve as a young Millennial, while you may also intend to sell your business for a profit after graduation.
With this in mind, it’s important to seek out agile funding models such as invoice financing, which drive short-term debt cycles and enable entrepreneurs to retain all of the equity in their venture.
With invoice financing, you simply sell your accounts receivable to third-party investors, helping you to negate 30, 60 and 90-day invoice repayment terms. This allows you to optimise your cash flow at all times, while the total amount borrowed can be repaid when the client makes payment.
- Seek out Targeted Loans for Students
If you’re business idea is exceptionally low-cost, you may instead choose to secure a one-off, personal loan that provides access to much-needed firms. These unsecured, short-term loans cap the amount that you can borrow, while they can also be repaid quickly at competitive rates of interest.
The key with loans of this type is to ensure that you make the full repayment within the designated time-frame; otherwise you may incur missed and late payment charges.
Although short-term lending is often vilified, it’s now well-regulated and can provide an instant cash boost that can be invested into your firm. It can also be repaid quickly, while there’s no need to use the venture as security.
- Consider Equity Crowdfunding
Historically, crowdfunding enables independent and student ventures to source small amounts of capital on exchange for gifts and prizes.
This market has become more professional in recent times, however, with the emergence of equity crowdfunding enabling entrepreneurs to seek out larger sums of capital in exchange for equity.
Equity crowdfunding platforms are ideal for burgeoning student start-ups, as they connect individuals with targeted and motivated investors who want to get in at the ground level. This also removes many of the barriers to entry that can surround funding, making it far easier to bring products and services to market.