Posts Tagged ‘Financial’
How to Finance a Business
As often happens, the money available for the entrepreneur does not cover needs no reason to even bring up the project. Or a part of is non-monetary contributions (machinery, etc.) So that not all capital “begins in the bank.” You have to get more money.
Leaving aside the contributions of purely capitalist partners and the particular case (and almost science-fiction) of venture capital, entrepreneurs or as specifically, the company is left with only the possibility of obtaining funding from third parties.
The resources of others, unlike the capital, must be returned within a specified period and almost always with the additional payment of certain interests. These resources are available short or long term. Thus, the external resources obtained in the short term should be returned more or less immediately, probably within the current year or within a few months. The long-term resources allow time delay repayment of capital, although of course paying a larger amount of money in interest.
There are two main sources for obtaining external resources:
* Suppliers
* Financial Institutions
* And there is yet a third “semi-source” funding in grants administration.
The first source of funding is in the same suppliers of the company. In the same way that customers can be a source of funding requirements by not paying in due time, providers can “make money” if we pay them a little later. During the (brief) period of time, the company has benefited from money in the form of goods, or have been lucky to sell for cash. Obviously this is short-term financing, if not the very short term (we can speak of two, five, 15 or 60 days, for example).
Obtaining credit from suppliers can vary widely from sector to sector. In areas of retail distribution can be very difficult to fill a store without a first aid from wholesalers or manufacturers of products. In other sectors, until they have spent months or even years of unblemished reliability in payments to suppliers, it is simply impossible to obtain funding from the suppliers.