BUSINESS SENSE
“Type of Capital Desired” – Week 14
Nancy Larsen, Enterprise Facilitator of SEFP

It is easier to find something when you know what you are looking for and in what direction it might be. The following are some of the sources of capital options for small businesses:

• Debt Funding (usual small business source)
• Equity Funding (need to share control)
• Angels (private investors)
• Venture Capital (looking for huge returns)
• Joint ventures/Strategic Partnerships
• Small Business Administration (guarantee loans to banks)
• Equipment leasing
• Limited Partnerships
• Lines of Credit

Debt funding is normally cheaper and easier to find than equity funding. Debt typically carries the burden of monthly payments, whether or not you have positive cash flow and is usually available to all types of businesses.

Equity investors expect little or no return in the early stages, but require much more extensive reporting as to the company’s progress. They have invested on the gamble of very high returns. Therefore, investors anticipate that goals and milestones will be met and are restricted to businesses with fast and very high growth potential.

There are numerous creative way to finance your business. If one of those comes your way take a moment to investigate it. You can never know too much about how to capitalize your business.

Remember – “Even if you are on the right track, you will get run over if you just sit there”. (Quote of Will Rogers)

Next weeks topic is: “Find Your Funding Source”

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