Business Financing For Small Businesses Essay

Title I and Title V of the Americans with Disabilities Act 1990. This is also administered by the EEOC to aid small businesses. This law makes it illegal to discriminate against a

par. 3). Start-up capital plays a vital role in putting up a business. How are the owners will operate the business without the finances? How are they going to pay all the expenses like salaries, taxes and materials they need for the business without the money? There are several ways on how to finance the business. Canada Business Network (n.d.) enumerates these ways like government grants, private sector financing, financing from non-government organization, equity financing and personal assets (par. 1). In Canada, there is a government owned financial institution that supports the finances of small businesses which is called The Business Development Bank of Canada (Williamson, 2008, p. 33). Most small business owners do not realize that there are several pathways to finance their businesses that’s why they end up frustrated and unsuccessful. It would be beneficial for the small business owner to know that there are resources available for

Starting a business means involvement of lot of funding no matter what type of business it is. Business start up loans grants are very helpful for those who wish to start their own business but lack proper funding to launch them. If you have a good business idea and you have also surveyed the market to foresee the future of your business, you can apply for these loans or grants. The first thing is that whether you believe in yourself and success of your business idea or not. Your belief will get more weight if you take a genuine survey of the market and find out what could be the future performance of your business type. Once you are sure about the success of your business, you need to make a good business plan. This is one of the important parts when you have decided to apply for the business grants. Also, search for the grants that are capable of fulfilling your business needs and will help you accomplish them. There are various organizations that offer grants for new businesspersons along with the government agencies. Make use of all the resources and research the availability of the grants. Apply for all that you qualify increasing your chances of getting approved. Finding the right grants is the most important step and you should invest some time and effort in this. The main intention of business start up loans grants is to provide necessary moral and financial support to new entrepreneurs so that they are able to get back to their feet and start earning their living.

These methodologies are important amongst entrepreneurs who are seeking financial funding for a second round to recover financially. Venture capital amongst small businesses refers to the private equity used to finance new or existing businesses perceived to be long term. These forms of funding are currently used to facilitate businesses financially challenged. The traditional financing sources are financing strategies that are primarily used by investors to restore their business financially (Reichert, 2007). The traditional forms of funding include grants to fund the small businesses.

Now that the small business idea has become more that just fine print, it is time to put together a loan package that explains the story of the company. There are important questions to answer, demonstrating the company’s ability to correctly make important financial decisions, and detail how the business will pay off the loan. This paper will include the requirements of a loan package, creditor requirements, a ratio analysis, loan justification, and how the company plans to use the proceeds.

Before we begin to dip into different ways of getting a small business loan, let's first talk about the important news of U.S. President Barack Obama's renewed legislation on federal loans.

Angel Investors - The main business angels vary from venture capitalists in their motives and level of involvement. Often angels are more involved in the business, providing ongoing mentorship and advice based on experience in a particular industry. For that reason, matching angels and owners is critical. There are substantial easily locatable networks of angels. Pitching to them is no less demanding than to a venture capitalist as they still review hundreds of proposals and accept only a handful. Often the demands around exit strategies are different for an angel and they are satisfied with a slightly longer term investment (say 5-7 years compared to 3-4 for a venture capitalist).

Numerous large businesses that are operating today were once started as small businesses. A new business is established to create a good or service that no other businesses have ever created or simply a product of higher quality than existing products, with the purpose of meeting customers’ needs and earning profits. Due to the technological advances at the present time, starting and operating a new business is less laborious. Nevertheless, would-be entrepreneurs should be familiar with the proper approaches to start their businesses.

Small businesses were once the backbone of the United States economy. After a time these business owners expanded, merged, and bought other businesses. This historic business trend has created some the well know corporations we know of today. One example would be the development of Wal-mart. Today, small businesses operate in the shadows of “big box” stores. However, small business owners account for more than 90% of, but only less than 5% or 10% of the GDP, “gross domestic product.” As a manager of a large corporation or a prospective business owner it is wise to be knowladgeble of new competitors, state of the economy, and current management trends. There are trends today that will change everyone’s expecatons of small business

SBA provides small businesses with an array of financing for small businesses from the smallest needs in microlending - to substantial debt and equity investment capital (venture capital) (United States, Department of Small Business Administration, n.d.).

Small business can finance their firms through debt or through equity sources of capital. Debt sources typically include; short or long-term loans from wealthy individuals to banks, while equity sources often include the owner’s wealthy individuals and/or Angel Networks. Venture capital is not a typical source of equity financing for most small business, as these businesses will not have the required growth potential Venture Capitals need to manage their risk return requirements.

Group Capital’s mission is to broaden the finance options beyond the traditional model (banks) and provide access to a diverse offering of financial products and services. Their financing options may aid an existing business to scale or support a startup fund their innovative idea. The banking industry focuses less on small business lending. For banks, lending to small businesses, in small dollar amounts, can be expensive and risky. These lower dollar loans are imperative for startups and small businesses. Group Capital will facilitate investor transactions via one of their branded websites.

investors exist for larger amounts of capital such as VC funds and banks, entrepreneurial initiatives that require much smaller amounts to start with need to rely on friends and family or own savings. They then also make extensive use of bootstrapping techniques to mitigate their financial constraints, by boosting their short-term profits.

Debt and equity financing are your two basic options to raise money for a start-up company or growing business. Debt financing includes long-term loans you get from the bank. Equity financing is private investor money you get in exchange for a share of ownership in the business. Now I want to explain about the advantages and disadvantages of using equity capital and debt capital to finance a small business's growth. The advantages of Debt is financing allows you to pay for new buildings, equipment and other assets used to grow your business before you earn the necessary funds. This can be a great way to pursue an aggressive growth strategy, especially if you have access to low interest rates. Closely related is the advantage of paying off your debt in installments over a period of time. Relative to equity financing, you also benefit by not relinquishing any ownership or control of the business. Interest on the debt can be deducted on the company's tax return, lowering the actual cost of the loan to the company. Raising debt capital is less complicated because the company is not required to comply

A venture firm could help facilitate that, it could act as an intermediary for both the entrepreneur and the investors.