Getting investments for a dream business
Source Money for Business
It is important to have money to invest in business. Therefore, in order to achieve their dream business, I have to look for funds in various firms. This paper seeks to investigate the ways I would source money for my business.
Borrowing from Various Sources
Notably, there are many kinds of borrowing according to Cassar. One can lend from private investors, banks, private loans, personal assets, personal credits, private loans, and from the small business administration (SBA).
Choosing Private Investors over Bank Loans
If I need one million dollars to start my dream business, I would choose to raise the fund by sourcing from a private sector. Using private investors rather than using bank loan is a lot easier process, since one does not have to fill a lot of forms or even engage in some paperwork necessary for one to be given banks loans. Another reason for using private investor than bank lending is that it is not founded on approval or rejection based on the application. The implication is that bank loans require a lot of processes for one to get such loans. Admittedly, banks exist for lending money; however, most borrowers have been worried about the processes involved in the securing of bank loans as well as the interest that the banks charge. I prefer private investors to bank loans because the private investors are not motivated exclusively by profit (Cassar 263). Moreover, some of the private investors find it easy helping young entrepreneurs' business thrive. Furthermore, both forms of borrowing have benefits as well as risks. The private investors may have bad debts from its borrowers. However, it will attract more lenders (Clark, Gordon, & Ashby 279). The bank loans may experience few people taking loans due to their detailed process as well as the interest they charge.
Considering Benefits and Risks
Overall, choosing sources of financing can be as easy as examining the only alternative will take you. Perfectly, one will have a preference of several options. Thus, it is important to go for the choice that will give you more benefits than risks.
Works Cited
Cassar, Gavin. “The Financing of Business Start-Ups”. Journal of Business Venturing, vol. 19, no. 2, 2004, pp. 261-283.
Clark, Gordon L., and Ashby Monk. “The Scope of Financial Institutions: In-Sourcing, Outsourcing, and Off-shoring”. Journal of Economic Geography, vol. 13, no. 2, 2013, pp. 279-298.
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