Methods of Funding for Organisations: An Analysis and Timing Guide

This report delves into the diverse methods organizations employ to secure funding, analyzing the strategies of angel investors, bank loans, and crowdfunding. It explores the advantages and disadvantages of each approach, providing insights into the situations where each funding method...Read More

Access The Various Methods Through
Which Organisations Access Funding
And When To Use Different Types of
Funding

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Different methods used by firms to access funding.....................................................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Funding is act of offering resources to finance a programme, need or project. While this
is typically in type of money, it can also take kind of attempt or time from a company or
business. The current report will base on specific question that is access approaches through
which companies access funding and when to utilize varied forms of funding.
MAIN BODY
Different methods used by firms to access funding
In recent time, there are varied types of funding approaches available in business world
that may be used by various organizations for business purpose.
Angel investors-
This is one of the best and effective methods of funding, that can be utilize by companies
operating in specific industry for increasing profit margin and productivity level rather than
competitors. Angel investors are persons with extra money and highly interest to invest in
developing or upcoming start-ups businesses (Crick and Crick, 2018). They also act in teams of
network to jointly screen and measure proposals before taking decision for money investing.
Furthermore, they can also provide advice, suggestions or mentoring alongside capital.
Companies can take help from angel investors for assessing funding, which is really very
important for them in order to grab available market opportunities that may be require fund.
Many prominent organizations including Yahoo, Alibaba and Google take funds from angel
investors. It alternative type of investing usually occurs in a firm’s early phase of business
growth, with capital investors expecting an up to 31% equity. They prefer to take more
challenges or risks in investment for high returns. They play vital for based on providing funding
to organizations.
Crowd funding-
It is a form of financing where a company or start up business is funded by a wide
number of individual people who finance the organizations with a small amount of fund

(Sorenson and et.al., 2016). It is one of the easiest and simplest methods of funding, which help
companies to assess money for current or further operations. While a individual investment may
range from a little dozen to a few hundred pounds, when a firm progress into phenomenon, wide
amounts of funding can be increased this manner. The well known crowd funding sources are
Indiegogo and Kickstarter. The most general types of it form are based on either free of cost
financing, which is pre-pared for a item to be manufactured in practice, or crowd funding where
single investors obtain a few stake in a firm from a very tiny amount of profit. It require by firms
when they are exploring business concept and validating their creative ideas, they are in pre-seed
stage in terms of funding. At that time above funding sources or methods may be considered as
friends, family or fools.
Bank loans-
Along above two methods organization also asses funding through bank loans which are
one the most common funding approach. It can be said that companies can assess funding or
raise money through Bank loans, which is a legal process. Usually, banks are the first place that
organizations go when thinking about funding (Rostamkalaei and Freel, 2016). They are provider
two types of financing for varied types of ventures. One is working capital loan and other is
funding. Working capital loan is a loan needed to run single completed circle of profit generating
operations and limit is typically decided by hypothecating debtors & stocks. Firms take loans
from banks for different purposes, which relate to increase profit and provide better outcomes in
return. Funding from bank can include usual procedure of sharing business idea or plan and
valuation detail, along with specific project study based on which further loans are sanctioned.
Almost every bank in UK or other countries provide SMEs finance through different
programmes.
Utilize different types of funding-
Organizations can use several types of funding while starting a new project, plan or
business innovation idea which in return increase profitability, productivity and sales even better.
Furthermore, it can be said that bank loan as type of funding can utilize to get key resources for
expanding business.

CONCLUSION
From above analysis, it has been concluded that companies for purpose of funding are
using varied types of approaches such as angel investors, bank loans and crowd funding, in
effective manner. Furthermore it has been summarized that firms are using several types of
funding when it required or in specific requirement like to establish new business. By assessing
funding from suitable method, companies are achieving business aims and objectives in
systematic manner.

REFERENCES
Book and Journals
Crick, J.M. and Crick, D., 2018. Angel investors’ predictive and control funding criteria. Journal
of Research in Marketing and Entrepreneurship.
Rostamkalaei, A. and Freel, M., 2016. The cost of growth: small firms and the pricing of bank
loans. Small Business Economics. 46(2). pp.255-272.
Sorenson, O and et.al., 2016. Expand innovation finance via crowdfunding. Science. 354(6319).
pp.1526-1528.