Obtaining Financing - New Business Tool Kit

If you are not independently wealthy, and perhaps even if you are, eventually you will probably need to obtain some outside capital for your business. In some instances, you may need to obtain capital for the initial expenses prior to opening your business, or, the funds you require may be for expansion or working capital during the off season.

Generally, business financing can take two forms: debt or equity. Debt means borrowing money. The loans may come from family, friends, banks, other financial institutions, or professional investors. Equity relates to selling an ownership interest in your business. Such a sale can take many forms such as the admitting of a partner or, if you are in a corporation, issuing of additional common stock options, or warrants to investors. It is typically a prudent idea to consult with your lawyer, as there are many significant legal ramifications to such a step.