Investing In What?-39

Financial Markets For The Rest Of Us
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds

Page 39

analysis, and forecasting among other things; otherwise, how can the loan maker be sure of payback? So where can you go to get a loan for your business?

Family And Friends — This is a good source of money, especially if you have a few wealthy people in your close circle who trust you and do not mind waiting to be paid back, or even never being paid back, in case your business idea fails.
Angel Investors—Your business may be able to attract initial funding from private sources such as business people or various institutions in return for a stake in your business.
Corporate Funding — Sometimes a company might find it worthwhile to invest in a business in return for receiving the goods and services of the newly created business at favorable prices. Many times such a business is created as an offshoot of an internal project within the supporting corporation. Outsiders may find it difficult to attract corporate funding since they may not be as knowledgeable about the company’s working and specific requirements. Another drawback for these types of businesses is that they may end up entirely dependent on their subsidizing companies, making their tailored products and services less marketable to others.
Government Loans — Many entrepreneurs secure financing through the many types of government assistance available, such as those provided by the Small Business Administration (SBA). These loans usually have favorable interest rates and have helped start thousands of businesses across the US. There are also specific programs for minority-owned businesses in order to promote a more diverse business landscape across the country.

Bank Loans — Many financial institutions are also willing to lend money to those with viable business plans. The interest rates on these loans are generally higher that those of the government but there is less red tape and larger loan amounts maybe available. …