funding is key
Every entrepreneur, regardless of industry or trade, needs funding to launch their business.
How you fund your business is one of the earliest and most important decisions you will make as a small business owner.
However, every business requires different kinds of funding, and understanding the different business financing options available to you can be tricky.
Planning for your immediate and long-term financial needs is key to your long-term success.
Before you choose a financing option, make a list of all your financial needs. Do you need to improve your cash flow? Does your business need long-term financing?
Business Financing Options
How will you use financing to grow your business? What is your personal and business credit history? As you answer these questions, you can consider two general types of financing: debt versus equity.
Debt-based financing is essentially a business loan. A lender provides working capital to a business who must then repay the funds, plus interest, over a set period of time.
To secure a loan, a business must usually provide some form of collateral that the lender takes if the loan isn’t repaid. Equity financing, on the other hand, is when a business owner gives a percentage of their company (shares) in exchange for financing.
For most small businesses, debt-based financing is the best way to fund your company as you retain full control of the operation. There are many different types of loans to consider, from traditional bank loans, micro-loans, lines of credit, and so on.
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