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Banks, lenders, are in the business of making a profit.

They want a business to have a proven record of success before lending funds.

Also, the state of the economy is a factor. During a

recession, for example, it's more difficult to get a loan.

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14y ago
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Q: Why is so difficult for small business owners to raise the capital needed to start a business?
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Related questions

What is the amount of the capital?

Capital is the amount which invested by the owners of business in business and refundable by business at the time of liquidation.


Is owners capital a liability?

Yes owners capital is liability for businss towards its owners to be return back at the even of liquidation of business.


What happens when the owner invests cash in a business?

When owner invests more cash in business it increases the owners capital in business and business becomes more liable towards it's owners.


Do owners withdrawals decrease owners equity?

Yes owners withdrawals results in reduction of owners capital from business.


Which type of account is capital?

Capital is an equity account and liability of business to payback as it is the amount invested by owners in business.


What is the difference between owned and borrowed capital?

Owned capital are amounts or resources that belong to the owner or owners of a business. Borrowed capital are amounts or resources that are loaned to the owners of the business by an outside person or organization.


What is the definition of capital in business?

Capital is the amount of money the owners of the business put in to start the business. The capital can go up if they put more in or down as they spend it on things like rent. It can also go down if the owners draw on it (take money out)


Do owners withdrawals decrease owner's equity?

Yes owners withdrawals results in reduction of owners capital from business.


Difference between share capital and owner equity?

Owners equity is that portion of capital which is invested by actual owners of business while share capital is that portion of capital which is invested by third parties or investors in business like general public etc.


Is owner capital credit or debit?

owners capital is liability of business that's why it is credit balance.


How is drawings treated in the balance sheet?

Share Capital is the amount invested by the owners of business into the business.Drawings is the amount withdrawn by the owners of business.So it is not surprise to show the drawings from deduction from the share capital because net effect is the reduction of the share capital of the owners of the business.


Why would business owners want to invest in capital goods?

because