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Sources of Financing for Small Business
By Denise Kirk-Murray, MBA | August 7, 2007
Where can I find money for my business? That is the number one question I am asked by business owners.
The first place I tell them to look is at their own resources. Lenders want to see that you have invested in your business before they will give you their money. Your own savings, investments and credit cards are the first places where you may go.
Besides using your own money, other places you can look for financing your business are:
Bank Loans
This is one of the first places business owners look when financing their business. Bankers look at the 5 C’s of credit when considering loan approval. These are capacity, capital, collateral, character and conditions.
Trade Credit
Your suppliers can provide credit to you through invoice payments due 30 to 60 days from purchase.
Factoring
A factor buys your accounts receivables at a discounted rate, and then the factor collects the money. You get your money for your invoices immediately without having to wait for the customer to pay.
Equipment Leasing
Lease your equipment, rather than buying it to avoid spending a lot of money initially on equipment.
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August 8th, 2007 at 5:27 pm
Hello Denise!
I really enjoyed reading your article on financing for small businesses because not a lot of new business owners know where to start. It actually make me think back to when I first started.
I didn’t have any funding. The only thing I started out with was my last paycheque from my corporate world job. I know it is unconventional but I knew going into my business what I wanted to accomplish and that I needed to succeed.
Thank you for the great article and advice!
Trina Lamarche
http://www.vaassistant.com
August 18th, 2007 at 12:27 pm
Trina,
I applaud you for trusting yourself and taking the chance on following your dream of starting a business. I wish you great success in your business!