Business Capital Funding

Written by Linda Alexander
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Business capital funding comes from many different sources, including the business owner's pocket. The Small Business Administration (SBA) and private individuals also lend money to new and growing businesses. Banks may or may not loan money to new companies, because it is too much of a risk.

Friends and relatives may also provide business capital funding. However, be aware that these people might expect to have a say running the business. After all, they are putting money into your venture and essentially own some of its equity. Or, friends and relatives might invest in your company simply because they want to help you out.

Obtaining Business Capital Funding

When you seek funding from any source, you should be prepared to share your business plan with the lender. A well-written loan proposal is also helpful. Explain in detail how much capital you need and how it will be used. Once you receive funding, you will probably have to supply periodic financial statements to the lender also.

Business capital funding is available from many different places. There is a lot of competition with the SBA loans, and banks might not lend to a new company. Each source has its own advantages and disadvantages. Putting your own money into your business will prove to other investors that you are committed to your business and are serious about making it profitable.


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