Financing a Small Business. 4.00 Explain the fundamentals of financing a small business. 4.02 Discuss sources used in financing a small business. How are you going to finance a small business?.
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4.00 Explain the fundamentals of financing a small business.
4.02 Discuss sources used in financing a small business.
1. Equity sources: Money or capital contributed by owners; capital sources that trade cash for some portion of ownership or equity in a business.
2. Debt sources: Money or capital that is borrowed and must be paid back with interest.
2. Types of loans available
Something of value that the lender can claim if the debt is not repaid.
The bank will consider all of the environmental conditions such as competition, growth, location, and economic outlook in which the business will operate.
The bank will want to know what kind of insurance coverage the entrepreneur has.