Each year, many people decide that they want to start their own business. While the business itself might be different, they have one thing in common: they all need financing to get up and running. In this article, we’ll take a look at a few options you have when it comes to financing your new business.
Two Ways to Finance
There are two major umbrellas under which business financing falls: debt and equity.
Debt is a loan/credit line that gives you the funds you need, but you must repay it within a certain period of time. This is typically secured by some sort of collateral and, if you don’t pay it back within the specified period, the asset can be taken from you.
Equity is selling part of your business, known as an equity stake. You will not be expected to repay it because the new owner/partner has voting rights, cash flow, and other benefits associated with that equity that he bought.
Basically, every type of financing is either going to fall under the umbrella of debt, under the umbrella of equity, or in some cases, can be a crossover of sorts.
Following are 9 Common Business Financing Options:
SBA Microloan Program
Business Loans/Credit Lines
Purchase order funding
When it comes to funding your new business, things tend to get a bit tricky- but it is definitely something that can be done. Simply take some time to consider some of these common methods for coming up with the cash you need to start a business and see what works. In addition, you can contact JHF Capital for help with making the decision that’s right for you. In the end, you’ll be so glad that you took your time and worked with a professional on getting the capital you need to start your own business.