A lot of people who have brilliant ideas have this issue of being able to raise funds for their start-ups, raising funds for a start-up remains a very big issue because very little people believe in business at its early stage until it grows into something big. Gladly, start-ups can still raise funds through some ways and then they can easily have their ideas blossom into something that everyone would like to be a part of.
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The first and most common option for most start-up entrepreneurs is usually to source for funds from family and friends, these are always the very first options that they have although it is not really feasible because these friends and family might probably not believe in the dreams and vision of this entrepreneur but once the entrepreneur is able to get the capable friends and family convinced enough to believe in his or her dreams, then they become the very first sought after option for the entrepreneur to raise capital.
There are ways to get investors to give you money but before any investor supports you with their money, you have to present them with a good business plan, investors are basically concerned about how to make profit so before they support any business, it needs to come with a good plan that will make them confident enough to put their money in a place where returns will be possible.
Money could also be borrowed from the bank or other institutions that give out loans to people, when these loans are given out, a particular percentage is attached to it and a particular time frame with which the money must be paid back, you need to carefully calculate if the interest rate on that loan is profitable and if it is good enough for you to take or if your business plan will not be able to afford such amount of profit.
Banks and institutions will only loan someone who is able to present them with a good business plan and a good experience for the job, if you have no idea about how the business is going to run, the bank will definitely not be supportive to give you any loan.
Conclusion.
Getting really good and getting the basic skill to run that business is more important to get than raising a capital, so before raising a capital to start a business, a good skill to run the business is more important and necessary. Before running around to get a loan, you have to first look for an option of presenting your business in a way that will matter to investors and developing a skill good enough to run the business correctly and to be able to generate profit for investors or pay back those who have borrowed you money.
Between the available ways, getting a loan from the bank is the worst in my opinion as I can always see the percentage they set isn't fixed so under particular circumstances the money you borrowed will get bigger and that's the trap where many people fall in.
Asking for a loan from the bank is the most logical thing to do, but not the wisest. Banks often impose high interest rates that later become a stumbling block to move forward because if the venture does not work, you are left with no possibility of recovery and with debts.
Commented by: @hojaraskita