Finance Business Financing

5 Best Sources Of Small Business Financing

Depends on how and from which source you finance your business can make a huge difference towards success or towards failure.

There are numerous financing resources available on the web, therefore in this arcticle we focus on the ones which are the most important ones for the global entrepreneurs.

 

  1. Angel equity. If you must sell an ownership stake to get your company off the ground, start by finding a respected industry executive who is willing to invest a reasonable amount and give your venture credibility with other investors.
  2. Bank loans. They provide short-, mid- or long-term financing, and they finance all asset needs, including working capital, equipment and real estate. This assumes, of course, that you can generate enough cash flow to cover the interest payments. Banks though are rarely provide financing for start ups with no cash flow.
  3. Local governmental development organizations. Economic-development organizations can often provide you government supported loan at low interest rate and in return often you need to execute certain business developments in the local area.
  4. Advance payments from customers–assuming the terms aren’t too heavy–can give you the cash you need, at a relatively low cost, to keep your business growing. Advances also demonstrate a level of commitment by that customer to your operation.
  5. Vendors: you may need capital to finance your operation, but you can negotiate terms with your vendors which keeps you in better CF positions than they are, therefore you practically “short term loaning” money from them. However, as always, how successfully you can execute this strategy is depends on the business volumes you have between the two of you.