Finance a Small Business

Finding finance for a small business can be one of the most intimidating tasks for a business owner. Financing structure of a business is determined by such factors as the nature of the business, financing needs, risk, and value the business. Whether you are looking for finance for a business, project, expansion or acquisition, you have to develop what exactly your financial needs are.

A small business owner may put down his own money 20-30% of the business’ financial needs as equity. The next of the 20-30% of the finance can be made available from private investors or venture capital.

The rest of the finance can be provided by bank and financial institutions in the form of short term working capital, inventory finance, equipment finance and also long term debt. It is important for you to obtain finance which fits your business structure, needs, and capability to generate future cash flow to pay off the debt. 

Debt finance may be available in the form of non-secured finance like short term debts, long term debts and line of credit financing. Unsecured debts are typically known as cash flow finance and require credit worthiness.

Debt finance may also be in the form of asset based or secured finance which may include real estate, equipment, inventory, accounts receivable, personal assets, government guaranteed finance or letter of credit. 

A customized mixture of secured and unsecured debt should be specifically designed for your company’s cash needs.