The Basics of Financing a Small Business

[Faith B]

The Basics of Financing a Small Business are important for any new or established business. You should consider debt financing as one option to start or expand your business. A bank or lending institution can offer debt financing for small businesses, although this option may not be appropriate for all businesses. Whether you need debt financing for a short term, medium term, or long-term loan depends on the size and nature of your business. The bank or lending institution will be able to help you find a suitable loan at the right price.

When applying for a loan, it is important to consider the time frame and urgency of your need. For example, if your business is a seasonal business, you will need financing that will cover the seasonality of your operations. Similarly, if you are a seasonal business, you will need financing during the slow seasons. Lenders will evaluate your company's management skills, as well as your business plan.

Your company's assets can be a key asset in evaluating your application. These include land, buildings, machinery, inventory, cash, and equipment. If you do not have any of these assets, you can always use your own money for financing your business. However, you should remember that your business is limited by how much money you can save. Therefore, it is best to start with the money you already have.

Another option for financing your business is to apply for a loan. Unlike lines of credit, a loan is not a long-term asset. You can use it as needed when you need money. You can use the loan to pay off debts and expenses. Lenders also consider the amount of your business's assets. An asset is anything that a company can sell on credit. Whether it is an inventory item or a big order, your assets are important to your business.

While there are many ways to finance a business, a loan is a good choice for a small business. When looking for a small business loan, you should consider the types of financing and the risk of each type of business. You should be able to pay off the debt on time. The amount you borrow will depend on the type of company. You can also look for an existing line of credit to get a mortgage.

A business loan is one of the most popular ways to finance a small business. This type of loan is the most common form of debt financing, and you can choose between unsecured and secured loans, depending on the nature of your business. In addition to debt financing, a business loan can be divided into two types. While a secured loan is the most secure, an unsecured loan is the least expensive.​

 

[Kingsley]

Generally in Nigerian people depend largely on small businesses. Looking at the harsh economic situation we are having today people even see it as a kind of struggle to be able to even manage to get the resources to finance even that very small business. Life is hard here in Nigeria. My government are so insensitive to the plight of the people, and this has led to a lot of uproar in the country. Unemployment is at it highest I have even seen since I was born and the rate at which crimes has increase has never been this high since the history of this country. In fact alot of things going on today is beyond what words can actually quantify and it is so tough even more for the educated class as they are made to roam around with nothing to do. This has made alot of people to fall back to sole proprietorship and they are still not find in it easy because rising funds is a major issue. But thanks to all the microfinance organizations that we have here in Nigeria that is still keeping all the small business alive today hence they would have all gone into extinction.

 

[Mika]

Financing a start-up can be really risky, however, if the start-up becomes successful, you also make a lot of money. When you invest in a start-up, you will have ownership on the equity and when the start up succeeds, you can either sell your equity or continue to earn profits on investment. In case the start up is your own company, you have two options with your start-up if it becomes successful, you can either sell to another company or individual or get more financing to build it a big business. Selling to another company is a common practice. YOutube, google's one of the most successful products was not actually created by Google, Google bought from another company. Whatsapp and instagram are actually not facebook's products, facebook bought from other individuals. If you manage to build a successful business, you can sell it for a higher price, or continue to work in the business. Netflix is currently the biggest streaming service, however, the company was once at a loss and tried to sell itself to Blockbuster. If Blockbuster had bought the company, the creators would have made 50 million US dollars, but BLockbuster refused and today Netflix is multibillion-dollar company.

 

[Abigael]

Just like in Nigeria, so many people in my country, Kenya depend on small businesses to earn a living. Even those who have graduated from collages and universities prefer to start small enterprises because it is so hard to get employed right now.

Stating a small business is a great option. The only problem is that you will still face some trouble raising the funds needed to start that business. The amount needed to start it may be small but still hard to raise due to lack of a source of income.

So the first thing you can do in order to get funds for a small business is to look for a way to earn the money. One thing I always tell people is that you should not despise any job as long as it is legit and you have the ability to do it. So you could work in a hotel washing dishes, or help out in a construction site. As long as you know your purpose for being there, you will soon earn the money you need.

You could also try online sources of income such as forums like this or learn a skill like web design that you can sell online. Which is a great source of income that you can do on the side while working in a job or when you have started your business.