Wednesday 10 August 2016

ARRANGING FINANCE:
Financing is needed to start a business and ramp it up to profitability. there are several sources of finance considered for starting a business. The financial needs of business varies from type and size of business. There are some sources of finance:

  • EQUITY FINANCING: It means exchanging a portion of ownership of the business for a financial investment.. Equity involves permanent investment by the company and is not repaid by the company.
  • DEBT FINANCING: It means borrowing funds from creditors with the stipulation of repaying those funds back with interest in a specific period of time. For the creditors, the reward for providing debt is the interest they get back with the amount provided.
  • LEASE: It is a method of obtaining the use of assets for the business. It is an agreement between the parties that specifies he rental usage of tangible assets in the business. Lease payments are often due annually. 
  • BUSINESS LOAN: Business loans are very common often companies take loans to start their business, government provides business loans which is paid in a specific period of time with interest to the government. 
  • BOOTSTRAPPING: It is possible to bootstrap your business and there are number of low cost start up opportunities. Many business start up with the ground of $10,000. It is vital for entrepreneur to know the principles that to keep the start ups as low as they can. 

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