| For anyone planning to put up a business, it is | | | | to another investor. In other words, you are not |
| important to keep in mind that as much as possible, | | | | forced to repay the funds. Generally, this form of |
| you should start it buy using cash or funds of your | | | | funding is given by venture capital companies. |
| own in financing a new business. You can do this by | | | | Most small scale businesses will then to make use of |
| starting small or slowly and even while you are still | | | | debt financing because equity financing are only |
| presently employed. | | | | interested in lending huge sums of money. So we will |
| You can start a business by working hard. You can | | | | talk more of the sources of debt financing as a way |
| work during evenings and during weekends while | | | | of financing a new business. |
| keeping up with your current job. This will ensure you | | | | Here are debt-financing sources: |
| that you will still have a job even when the business | | | | 1. Own Savings. This is the best option for you if you |
| will not come out as good. Other than that, you also | | | | have set aside some amount. You have to |
| haven't acquired debt while you are financing a new | | | | remember though, that you must have a separate |
| business. | | | | and sufficient amount for cases of emergency. |
| Sometimes however, other sources of funding might | | | | 2. Your Relatives. Usually, your family and your |
| be required depending on what type of business you | | | | relatives the easiest people to lend money from. If |
| have. When you try to find out your financial needs, | | | | you will be able to persuade or convince them of |
| keep in mind that you have to do your planning in an | | | | your business idea, they may be willing to let you |
| organized way. Do not forget about other factors | | | | borrow money. You also have to make sure that |
| that might affect your business like disease, | | | | you have an official loan document which states your |
| calamities or machine breakdown. | | | | interest rate and terms of payment. Just make sure |
| In preparation of financing a new business, remember | | | | that you will be able to return their money in the |
| these things: equipment, business license or permit, | | | | agreed length of time even when your business fails. |
| legal fees, salaries, advertising, office supplies, etc. | | | | 3. Banks and Lending Investors. There are a lot of |
| What any starting businessman should avoid is to | | | | local banks that allow you to loan money for putting |
| obtain additional financing while on the starting phase. | | | | up a business. This move will involve a presentation |
| There are two types of financing: debt and equity | | | | of a legal plan that justifies the amount that you are |
| financing. The first one means that you make a loan | | | | planning to borrow from them. |
| from anybody and you are compelled to repay the | | | | 4. Equity Loans. The interest rates for equity loan are |
| sum you borrowed. The latter one has something to | | | | usually low. |
| do with advertising or selling a part of your company | | | | |