Updated: 17 May 2015 05:51. By, Melkisedeck Shine.
👉[DON'T MISS] Why was the computer cold?
Debt financing
This is money loaned to the business from outside source that is paid back over time.
Key considerations in debt financing include:
- Retaining more control over your business.
- Payments strain on the cash flow.
- Imposition of restraints and conditions for repayment of the loan.
Types of debt financing are:
- Operating (A/R and Inventory)
- Short term (current assets)
- Long term (fixed assets)
Timing of financing
Entrepreneur who approaches a financier must be thoroughly prepared. This involves completing the business plan. There are ten factors to consider when an entrepreneur is timing for finance. These include:
1. Be prepared when meeting with an investor or banker. Have a completed business plan, executive summary or prospectus, and financial statements with you.
Demonstrate your knowledge of the industry
Know the strengths and weakness of your plan
Understand your financial information
Be clear and concise about the opportunity
2. Make sure you have the ability to repay or retire the investment.
3. Emphasize Managerial Abilities and credentials; particularly with equity investors whose investment decisions are largely driven by their confidence in your ability to grow the company.
4. Invest some of your own capital to demonstrate your own commitment and belief in the business.
5. Develop a long term financing strategy.
6. Find financing to suit your business. Be prepared to walk away from a deal if you don’t like it. (Easy Finance and Teachers).
7. Seek strategic alliances or joint ventures with suppliers or clients to leverage your financial resources.
8. Use your contacts. Networking is the key to “getting the world out”.
Make a list of everyone you know.
Add a list of everyone they know.
You will be amazed at how you can came up with someone who knows, or knows someone who knows, a key investor you may be trying to get reach. This really works!
9. Re-examine the capital structure of your business regularly to ensure it is appropriate. Proportion of bank financing, private investment and owner’s equity may change depending on the circumstances.
10. Know your financing objectives. Do you want to control or do you want growth? Sometimes financing growth means giving up control.
Read more on;
Ways of get money for your business
The primary sources of funds for small business start-ups are personal funds, friends and relatives, NGOs or private investors, banks, government agencies and programs, and venture capital… read more
Forms of Business Structure
There are several legal forms to choose from when selecting the best means of structuring your business. Carefully considering the various options before start may save time and money later. There are several forms of business structures including:.. read more
Business Concept and Idea Development
In order to market your product or service, you will want to be very clear about what it is that your business actually does or has to offer. You should be able to quickly and accurately describe your business concept in just a few sentences… read more
Assessing the Viability of the business Idea
An Idea is not necessarily a Business Opportunity: There is one crucial difference between an idea and an opportunity. An opportunity is based on what consumers want. Many small businesses fail because an entrepreneur didn’t understand this… read more
Ways of get money for your business
The primary sources of funds for small business start-ups are personal funds, friends and relatives, NGOs or private investors, banks, government agencies and programs, and venture capital… read more
Forms of Business Structure
There are several legal forms to choose from when selecting the best means of structuring your business. Carefully considering the various options before start may save time and money later. There are several forms of business structures including:.. read more
Business Concept and Idea Development
In order to market your product or service, you will want to be very clear about what it is that your business actually does or has to offer. You should be able to quickly and accurately describe your business concept in just a few sentences… read more
Assessing the Viability of the business Idea
An Idea is not necessarily a Business Opportunity: There is one crucial difference between an idea and an opportunity. An opportunity is based on what consumers want. Many small businesses fail because an entrepreneur didn’t understand this… read more
How to make people like you
Don't criticize, condemn or complain. Give honest, sincere appreciation. Arouse in the other person an eager want. Become genuinely interested in other people. Smile. Remember that a man’s name is to him the sweetest and most important sound in any language. Be a good listener, encourage others to talk about themselves. Talk in terms of the other mans interest. Make the other person feel important and do it sincerely.. read more
When to be silent
I Found this one somewhere and it made me think
I'm still learning….. read more
Son and dad plan for Valentine
Son: _Dad, what do I give my_ _girlfriend as a valentine gift?_
Dad : _How does she look?_.. read more
How to become smarter
Exercise Your Brain Just like you workout to build and strengthen your muscles, your brain, too, requires proper exercises to sharpen itself. Often, it is assumed to be a useless body part, but this is not true. As such, whenever you are engaging yourself in some activities, you are exercising your brain. Consider practicing activities, such as puzzles, crafts, reading, painting, gardening, and other recreational activities that will refresh and rejuvenate you and your mind, in particular. Read Quality Books Most of us love reading. But we often end up reading fiction, suspense, or romantic books… read more
A good Catholic Reflection
A Priest has just requested that this be shared, kindly reflect on it. Thanks!.. read more
What is this life? Life is always changing
A man is born today, Tomorrow he is dead.
A man lives in a mansion today, Tomorrow he lives
underground… read more
Clear explanation of Planning
Planning means looking ahead and checking out future course of action to be followed. It is a preparatory step. Planning is a detailed programme regarding future course of action. It determines on when, how and who is going to perform a specific task.. read more
How To function WhatsApp group
How to function in a Whatsapp Group?
Very nice Protocol.. read more
