Entrepreneurs can turn to a variety of sources to finance the establishment or expansion of their businesses. Common sources of business capital include personal savings, loans from friends and relatives, loans from financial institutions such as banks or credit unions, loans from commercial finance companies, assistance from venture capital firms or investment clubs, loans from the Small Business Administration and other government agencies, and personal or corporate credit cards. But for some business-people, these sources of financing are either unavailable, or available with restrictions or provisions that are either impossible for the company to meet or deemed excessive by the business owner. In such instances, the capital-hungry entrepreneur has the option of pursuing a number of nontraditional financing sources to secure the money that his or her company needs. Some of the more common nontraditional financing sources include selling assets, borrowing against the cash value of a life insurance policy, and taking out a second mortgage on a home or other property.
SELLING ASSETS Some entrepreneurs choose to sell some of their personal or business assets in order to finance the opening or continued existence of their enterprise. Generally, business owners who have already established the viability of their firm and are looking to expand their operations do not have to take this sometimes dramatic course of action, since their record will often allow them to secure capital from another source, either private or public. Whether selling personal or business assets, the small business owner should take a rational approach. Some entrepreneurs, desperate to secure money, end up selling business assets that are important to basic business operations. In such instances, the entrepreneur may end up accelerating rather than halting the demise of his or her business. Only nonessential equipment and inventory should be sold. Similarly, care should be taken in the selling of personal assets. Items like boats, antiques, etc. can fetch a decent price. But before embarking on this course of action, the entrepreneur should objectively study whether the resulting income will be sufficient, or whether the enterprise's financial straits are an indication of fundamental flaws.
BORROWING AGAINST THE CASH VALUE OF YOUR LIFE INSURANCE Entrepreneurs who have a whole life policy have the option of borrowing against the policy (this is not an option for holders of term insurance). This can be an effective means of securing capital provided that the owner has held the policy for several years, thus giving it some cash value. Insurers may let policyholders borrow as much as 90 percent of the value of the policy. As long as the policyholder continues to meet his or her premium payment obligations, the policy will remain intact. Interest rates on such loans are generally not outrageous, but if the policyholder dies during the period in which he or she has a loan on the policy, benefits are usually dramatically reduced.
SECOND MORTGAGE Some entrepreneurs secure financing by taking our a second mortgage on their home. This risky alternative does provide the homeowner with a couple of advantages: interest on the mortgage is tax deductible and is usually lower than what he or she would pay with a credit card or an unsecured loan. But if the business ultimately fails, this method of financing could result in the loss of your home. "Second mortgages are best for people who want to borrow all the money they need at one time and secure fixed, equal payments," wrote Cynthia Griffin in Entrepreneur.
OTHER POSSIBLE SOURCES OF FINANCING Some entrepreneurs obtain financing for growth and expansion through Franchising or licensing. Basically, they get money by selling the rights to a unique business or product to other companies. Other small business owners are able to form alliances or partnerships with other firms that have a vested interest in their success, such as customers, suppliers, or distributors. These business owners may obtain funds from their partners through cooperative work agreements, barter arrangements, or trade credit. The internet provides another potential source of leads for loans from nontraditional sources. For example, America's Business Funding Directory, at http://www.businessfinance.com, includes a searchable database of nontraditional funding sources.
Experts recommend using nontraditional financing to start a business or provide funds during periods of rapid growth, but emphasize that small business owners should consider it a temporary arrangement. "You should look at nontraditional financing," business loan broker Edward C. Hopson said in the Knight-Ridder/Tribune Business News, "but look at it with an eye to when can I get out of this, not as permanent financing…. When you get strong, the banks will be calling you."
define hrm briefly explain various functions of hr
Explain the significations of Operations management?
Leadership is an important behavioural topic for various reasons. Most people's behaviours are directly influenced by the type of leadership that they get.
whatis the primary purpose of the system development life cycle methodogy? explain the main steps of SDLC.
The modified Fibonacci sequence is used because it can model various natural phenomena more accurately than the traditional Fibonacci sequence. It allows for more flexibility and customization in representing patterns and growth in different contexts.
You can obtain financing for your business from various sources, including traditional bank loans, credit unions, and online lenders. Additionally, consider seeking investments from venture capitalists, angel investors, or crowdfunding platforms. Government grants and small business programs may also provide funding options. Finally, personal savings or support from family and friends can be another way to finance your business.
All the types of companies needs some form of financing. The financing of the companies will help it in handling the various forms of logistics.
The types of traditional energy sources include fossil fuels such as coal, oil, and natural gas, as well as nuclear energy. These sources have been widely used for many years to generate electricity and power various industries and transportation systems.
Supplemental financing refers to additional funding that is provided to bridge gaps in financing for a project or investment. It can come in various forms, such as loans, grants, or equity investments, and is often used to support initiatives that may not fully meet standard funding criteria. This type of financing is commonly utilized in sectors like real estate, infrastructure, and business ventures to enhance cash flow and facilitate project completion. It aims to complement existing financing sources to achieve specific financial goals.
BigBox is a hypothetical retail company that has undergone significant growth and expansion over the past four years. During this period, it has utilized various sources of financing in the financial markets, including equity financing through public offerings and private placements, as well as debt financing via corporate bonds and loans. The company has also capitalized on favorable interest rates to secure loans, while seeking venture capital and private equity investments to support its growth initiatives. Overall, BigBox's financing strategies reflect a diverse approach to capital acquisition in a dynamic market environment.
A finance company provides various financial services, including loans, credit, and leasing options to individuals and businesses. Unlike banks, they typically focus on specific financing products and may specialize in areas such as consumer finance, business loans, or equipment financing. Finance companies often assess creditworthiness and may charge higher interest rates compared to traditional banks due to the increased risk of lending. They play a crucial role in facilitating access to capital for those who may not qualify for traditional bank financing.
If you are referring to the crossword puzzle hints 'Obtain from various sources' or 'Collect from various sources' try the following clues:GleanHarvestGatherReapCull
Explain various performance measures of disks.
Sources of credit? In relation to business financing could be refer to the various means and ways in which one or an enterprenuer could acquire money to start his business. There are several means/places which one can get fund for financing his/her business or for starting a new one. This depends on the personal financial strength, financier or finance institutes. These means / places are: Banks Personal Savings Finance Houses Government Friends Family Donation conversion of Share or bonds
Sources of credit? In relation to business financing could be refer to the various means and ways in which one or an enterprenuer could acquire money to start his business. There are several means/places which one can get fund for financing his/her business or for starting a new one. This depends on the personal financial strength, financier or finance institutes. These means / places are: Banks Personal Savings Finance Houses Government Friends Family Donation conversion of Share or bonds
A source of light is an object or device that emits light. Examples of sources of light include the sun, lightbulbs, and candles. These sources produce light through various mechanisms such as combustion, electrical stimulation, or nuclear fusion.
Raising finance refers to the process of obtaining funds to support business operations, growth, or specific projects. This can be achieved through various means, including equity financing (selling shares), debt financing (loans or bonds), or alternative funding sources like crowdfunding. The choice of financing method depends on factors such as the business's financial needs, risk tolerance, and market conditions. Effectively raising finance is crucial for sustaining and expanding a business.