1. Provide an accurate description of potential sources of start-up capital

Start-up capital is the money required for when your new business venture is beginning. You should ensure that you have a strong business plan plus a clear idea of the amount of money you will need and where it's needed. This money can be obtained from various sources such as:

Banks

 You could apply for a business loan where you would pay back a monthly payment along with the added interest and any fee’s. The issue with bank loans is you may not have the credit to obtain the loan in the first place and if you do get the loan and are then unable to make the repayments then this can also effect your personal credit rating

Family & friends

 This is one with the most potential risk as should your business fail then you run the risk of losing the person who loaned you the money and possibly in a worst case scenario they could take you to court to get their money back. On a positive note borrowing from someone you know is a lot easier and faster. You should be just as prepared in your pitch for the cash from friends and family as you would if asking the bank and consider having a written agreement drawn up.

Angel investors

Angels are individuals who invest their own personal money into a start-up business or entrepreneurs in return for equity or convertible debt. Usually an Angel who invests in a company has some form of business experience within that industry.

Venture Capital

Venture capitalist are professional who invest in business venture, they look to receive returns of up to 25% and can invest in the business from anywhere between 3 and 7 years. They usually only invest in business that have a high growth prospects.