Business Financing

If there is one thing we can say about business financing it’s that no two businesses are alike and neither are their capital needs.  At some point in time, every business, no matter how large or small, needs some type of funding.  From equipment to inventory or start-up to expansion and growth, there are many diverse needs that a business has to contend with.  Granted, there is a number of business financing options available.  However, the problem is not how many options are available but which one is right for your business.

Knowing Your Options

Whether you need $10,000 or $1 million, there are only two types of money involved in most of the business financing options that are currently available to borrowers:

Debt – what you have borrowed and what you owe

Equity – what you trade for company ownership

The first step to determining the type funding you need for your business is to decide between debt financing and equity financing.  So what is the difference between the two?

Debt financing is money that is raised for capital expenditures or working capital by selling bills, bonds, or notes to businesses or individuals for investment reasons.  These businesses or individuals become the creditors and have the borrower’s promise that they will repay the principal and interest.

Conversely equity financing involves raising capital by selling shares of stock in a company.  Essentially, it refers to the sale of ownership in order to raise funds for the business.  Equity financing differs from debt financing, which are funds borrowed by a business or individual.

If your business involves equipment and machinery or real estate, and paying interest is the preferred choice over giving up a percentage of ownership in your company, then debt financing is the best option.  However, raising money through equity financing has some advantages to be aware of as well.  Granted, it reduces your share of ownership in your company.  But it potentially improves your level of creditworthiness.

Preparing Your Business

You may need to explore several business financing options as getting 100% financing from a single lender is a rare occurrence.  In order to qualify for every financing option possible, there are 3 factors that need to be considered.  First, develop a comprehensive business plan and emphasize the cash flow section.  Second, establish a positive payment history with your creditors in order to prove your ability and willingness to repay your debts.  And third, figure out the amount of funding (money) that you need to borrow.

The experienced staff here at Biz4Loans can assist you in accessing a variety of business financing options including equipment financing, hard money loans, a line of credit, and other types of loans that you may need.

  1. Accounts Receivable Loan Financing
  2.  Bridge Loans
  3.  Business Line of Credit
  4.  Asset-Based Loans
  5.  Equipment Financing
  6.  Unsecured Business Loans
  7. Working Capital Loans
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