Putting up a business or shall I say having a business may seem very easy but in reality, it is very complicated, tough and risky. Although you already started the business – you had the business ideas, invested personal money, channels for marketing etc., still, you want your business to continue and let it grow and produce more profit as time goes by. This is what happened to Jacquii LLC, although her business can manage to maintain in the market, still, she wanted her business to grow and earn more income. How to deal with it is a huge challenge for her to do so.
Apart from her personal money where she invested to her business, there are more other possible sources of financing such as loan from a bank, “love money” - loaned by a spouse, …show more content…
Consider the fact that all banks offer different advantages, whether it's personalized service or customized repayment. It's a good idea to shop around and find the bank that meets your specific needs.” Jacquii LLC can avail bank loans if she wants another source of capital to expand her business. She can easily avail the loan since her business can generate income. Since his father is a successful businessman also, she could possibly ask her father to invest and make her business a family firm.
Question two: 50 Marks
What are the advantages and disadvantages of using equity capital and debt capital to finance a small business’s growth? (600 words)
Both equity capital and debt capital can possibly work in certain type of business. It depends on the business that you want to put up. For a small type of business like sole proprietorship, equity capital is very appropriate, however for partnership and corporation, equity capital and debt capital is both applicable.
The first resource we can have is Equity capital which involves raising money by selling interest in the company. There are many advantages and disadvantages of using equity to finance a small business’s growth. Such advantages may include the …show more content…
Explain. (250 words) In my opinion, Jacqui Rosshandler should not accept the investment offer from Arthur Shorin. First of all, her business is currently plays good in the market, although the profit is not increasing as the years go by but at least she is incurring profit out of it. Yes, it is correct that her business needs to grow not only in her place but to all over the world. By doing so, she will be needing an investor or additional capital to make this possible. Investment offer by Arthur Shorin is not acceptable because what he is asking for in return is too much. It was like he wanted to own the company that she established. If I were Jacqui, since the purpose of her business is to expand and by expanding she can earn higher profit, I would rather look for some investors who will be my partners and who will fund its growth. It maybe angels investors like family and friends who are more interested and have the capacity to introduce the business to other market place. As per my understanding she just need additional fund to expand her business. She may resort to borrow additional capital from the bank in order to finance her business expansion. She can easily borrow certain amount because her business is stable and
Apart from her personal money where she invested to her business, there are more other possible sources of financing such as loan from a bank, “love money” - loaned by a spouse, …show more content…
Consider the fact that all banks offer different advantages, whether it's personalized service or customized repayment. It's a good idea to shop around and find the bank that meets your specific needs.” Jacquii LLC can avail bank loans if she wants another source of capital to expand her business. She can easily avail the loan since her business can generate income. Since his father is a successful businessman also, she could possibly ask her father to invest and make her business a family firm.
Question two: 50 Marks
What are the advantages and disadvantages of using equity capital and debt capital to finance a small business’s growth? (600 words)
Both equity capital and debt capital can possibly work in certain type of business. It depends on the business that you want to put up. For a small type of business like sole proprietorship, equity capital is very appropriate, however for partnership and corporation, equity capital and debt capital is both applicable.
The first resource we can have is Equity capital which involves raising money by selling interest in the company. There are many advantages and disadvantages of using equity to finance a small business’s growth. Such advantages may include the …show more content…
Explain. (250 words) In my opinion, Jacqui Rosshandler should not accept the investment offer from Arthur Shorin. First of all, her business is currently plays good in the market, although the profit is not increasing as the years go by but at least she is incurring profit out of it. Yes, it is correct that her business needs to grow not only in her place but to all over the world. By doing so, she will be needing an investor or additional capital to make this possible. Investment offer by Arthur Shorin is not acceptable because what he is asking for in return is too much. It was like he wanted to own the company that she established. If I were Jacqui, since the purpose of her business is to expand and by expanding she can earn higher profit, I would rather look for some investors who will be my partners and who will fund its growth. It maybe angels investors like family and friends who are more interested and have the capacity to introduce the business to other market place. As per my understanding she just need additional fund to expand her business. She may resort to borrow additional capital from the bank in order to finance her business expansion. She can easily borrow certain amount because her business is stable and