Finding the finance of between $20,000 (?10,000) and $500,000 (?250,000), can be surprisingly difficult. Banks generally require security, and most venture capital firms are not interested in financing these low amounts.

Business Angels are wealthy, entrepreneurial individuals who provide capital in return for a proportion of your company's shares. They take a high personal risk in the expectation of owning part of a growing and successful business.
This article will give you a good idea, if you should look for a business angel.
Your business is unlikely to be suitable for investment by a business angel unless the following main conditions are met.

1. You want to raise $20,000 (?10,000) to $500,000 (?250,000), and are willing to sell a share of your business, in return for the finance. Raising finance in the form of equity (shares) can strengthen your balance sheet.
(The bank or other lenders may then be willing to provide additional debt finance).

2. You can offer the Business Angel the possibility of a high return.
This usually means an expected average annual return of at least 20 to 30 per cent over the life of the investment.
Most of this return will be realized in the form of capital gains, typically over a period of three to five years.

3. You can demonstrate a strong understanding of your product and market.
Some business angels provide expansion financing for businesses with a proven track record. This enables an already successful business to grow.
Business angels are also a significant source of start-up and early-stage capital for companies without a track record. A business plan based on convincing market research is essential.

4. You have an experienced and professional management team.
As a minimum, you must have strong product and sales skills, plus you need to show enthusiasm and commitment. A measure of your commitment will be how much money you (and other managers) have invested in the business and how strongly your personal earnings are linked to the success of the business.

5. You are willing to develop a personal relationship with a business angel.
(usually, business angels want hands-on involvement). A business angel with the right skills can strengthen your business by adding skills or experience that you lack.

6. You can offer the business angel the option of an exit.
Even if the business angel has no plans to realise the investment by any particular date, the angel will want the option to be available. The most common exits are:
A trade sale of the business to another company.
Repurchase of the business angel's shares by the company, or purchase of the business angel's shares by the company's directors or another investor.

The business angels can be a very useful source of funding when the big boys don't want to know. So don't be scared to investigate this area of funding.

However, as with any financial agreements make sure you know what you are getting into, and more importantly how you can keep control.