The Financing Of Hospitality Industry

1690 Words7 Pages
1.0. Introduction Financing in hospitality industry, like in many other industries is of utmost importance and should be handled with extreme caution as it represents success or failure of the business. The following paper focuses on the most important aspects in financing in hospitality. 1.1. Available options for finances in hospitality Options Advantages Disadvantages Banks • Relatively low interests rates. • With adequate collateral loans from banks can be used as capital. • Require a long list of qualifications before a loan s granted. • Risk of losing property used as collateral in case default in payment of the loan occurs. Personal funds. • No monthly payments of loans • Complete control of the business’ finances. • Difficult to expand if all the funds were used a s capital. • No benefits of financial analysis offered by banks or other financial institutions. Alternative methods • Best suited for financial emergencies in a business. • Used for any expansion that would be required in a business. • Does not require collateral • Relatively high interest rates. • Best suited for already established businesses. • No risks of losing property as there is no need for collateral Just like in any other industry, businesses in hospitality industry require finances for capital and especially for expansion. In a bid to seek for finances the first option that most people turn to is the banks; however due to the numerous qualifications that banks require
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