CHAPTER 9: SMALL BUSINESS FINANCE
- Determine the financing needs of your business
- List the assets required for your business to operate effectively
- Determine the market value or cost of each asset
- Identify how much capital you are able to provide
- substract the total of the owner-provided funds from the total of the assets required.
- This figure represents the minimum amount of financing required
- Define basic financing terminology
- to procure financing, you must understand the basic financing vocabulary. Each major form of capital (debt and equity) has unique terminology that defines the details underlying financing agreements.
- Each form of capital has pros and cons that make it more or less desirable to the entrepreneur under given circumstances.
- Explain where to look for source of funding
- The search for capital and the application process can be unsettling as you sort through the various sources of funds.
- Major sources of debt financing include commercial banks, finance companies, government lenders, and insurance companies. Sources of equity include partners, venture capital firms, angels, and stock offerings.
- Finding capital is one of the most important tasks you face in starting and managing a business
- A thorough understandingog the issues involved will enhance your chances of finding the best source for your business.
- My View: Cash is King! Cash flow and funding are extremely critical for small business. Small business financing can be complicated and risky if the owner did not plan it well. The owner needs to do his/her homework and understand the business nature. When it comes to funding, he/she has to ask for the right amount from the right source at the right time.
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