Ganibade
Verified member
Where do I get start-up money is the most frequent query I receive as a small business startup coach.
When my clients ask me this question, I'm always appreciative. It is clear that they are serious about accepting financial responsibility for starting it if they are asking this question.
Not All Money Is Created Equal
Debt and equity are the two main forms of startup financing. Think about the type that is best for you.
Borrowing money is used to finance a business through debt financing. Any borrowed funds are regarded as debt financing.
Debt financing loans can be obtained from a wide range of sources, the most popular of which are banks, savings and loans, credit unions, commercial finance firms, and the U.S. Small Business Administration (SBA). Even when there is no interest involved, loans from family and friends are still regarded as debt financing.
Debt financing loans are granted based on your promise to repay them with your own assets and equity and are typically small and short-term. When a business is just getting off the ground, debt financing is frequently the preferred financial strategy.
Any type of financing that is based on the equity of your company is referred to as equity financing. In this kind of financing, the financial institution contributes funds in exchange for a portion of your company's earnings. In essence, this means that in order to get money, you will sell a portion of your business.
The typical sources of equity financing are venture capitalist companies, business angels, and other specialised equity funding companies. If managed properly, borrowing money from friends and family could be regarded as non-professional equity funding.
In contrast to debt financing, equity financing typically entails stock options and involves a larger, longer-term investment. As a result, equity financing is more frequently taken into account when a business is in its growth phase.
When my clients ask me this question, I'm always appreciative. It is clear that they are serious about accepting financial responsibility for starting it if they are asking this question.
Not All Money Is Created Equal
Debt and equity are the two main forms of startup financing. Think about the type that is best for you.
Borrowing money is used to finance a business through debt financing. Any borrowed funds are regarded as debt financing.
Debt financing loans can be obtained from a wide range of sources, the most popular of which are banks, savings and loans, credit unions, commercial finance firms, and the U.S. Small Business Administration (SBA). Even when there is no interest involved, loans from family and friends are still regarded as debt financing.
Debt financing loans are granted based on your promise to repay them with your own assets and equity and are typically small and short-term. When a business is just getting off the ground, debt financing is frequently the preferred financial strategy.
Any type of financing that is based on the equity of your company is referred to as equity financing. In this kind of financing, the financial institution contributes funds in exchange for a portion of your company's earnings. In essence, this means that in order to get money, you will sell a portion of your business.
The typical sources of equity financing are venture capitalist companies, business angels, and other specialised equity funding companies. If managed properly, borrowing money from friends and family could be regarded as non-professional equity funding.
In contrast to debt financing, equity financing typically entails stock options and involves a larger, longer-term investment. As a result, equity financing is more frequently taken into account when a business is in its growth phase.
