Sources of Capital For a Business Enterprise

There are various sources of capital for a business. You need adequate funds to start up an industry if you want the firm to stand viable and survive the global challenges, because enough money is required for business support, marketing, sales and distribution.

Put into consideration whether your savings, stock, life insurance, mutual funds, property or real estate investment can be used to finance your business. It is important you source for capital that suits the size and nature of your trade.

When looking for various sources of capital for a business, you should consider the amount of money needed to run your commercial enterprise. You must also evaluate your cash on hand, at the bank and the sum of money you can raise from your friends, relatives or banks. A detailed business plan and the amount you need to put into the venture must be handed over to the financial providers. The business plan must include cash flow projections, trading, profit and loss forecast, projected balance sheet and market analysis. Your financial projections can be on monthly basis for at least a year or annually for three years.

Your business plan must take into account the amount of loan required, date and time you need the cash, how the cash will be expended, date of loan repayment and the collateral used to getting a business loan. The sum of equity capital you personally introduced into the business must be stated to show your seriousness in the business.

To sum up, if you are looking for sources of capital for a business, the best thing is to prepare a business plan to show that your business is capable of making good sales and can repay the loan within the stipulated time. Make sure you understand the terms and conditions of the loan before you accept the loan package.

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