Sources of Financing Essay
1.1 Sources of Financing
There are basically two types of financing; debt and equity financing. Equity ﬁnancing means trading a share of ownership ofbusiness for a financial investment in the organization or company. Investment in the equity results in sharing of company’s profit and loss. Equity financing represents permanent investment in an organization and cannot be paid back at later stage. Equity financing is done by the investment throughpersonal savings, life insurance policies, home equity loans, friends and relatives, venture capital, angel investor, government grants, equity offerings, initial public offerings and warrants. Debt ﬁnancing includes obtaining trusts from lenders with the stipulation of reimbursing the …show more content…
Other income streams, for example, leasing property or receiving dividend from stock shares can be profitable and beneficial; in any case, these sorts of monetary sources regularly have their good and bad times. For instance, residentsor citizens may leave unexpectedly or run out on the rent; leaving the stockholder withno value to be received for their staring investment.Everymonetary source will have its suggestions, advantages and disadvantages. The way to discovering the right money related source is to look at the benefits and drawbacks and discover the best fit for a specific speculation opportunity, business advances, or other monetary need.
1.3 Source of Financing for Business Project
Friends and family members may be the most tolerant financial specialists. They do not have a tendency to make compromise over home and they