Funding the Business

Signature Assignment: Funding the Business Paper

Megan Bailey

FIN/375

1/18/2016

Robert D’Alessio

Signature Assignment: Funding the Business Paper

When it comes to funding a business there are various types available. Some of these types of funding are grants, loans, equity, and business relationship funding. Grants are the cheapest of the four different types. Grants are available for research and development projects in the name of Grand. Loans are provided against the suitable security deposit or the dependable earnings. Loans can be provided by credit cards, overdraft systems, bank loans, mortgages, small firms loan guarantee scheme, export guarantee scheme, and mezzanine. Equity is not easily available like some of the others. Equity can be provided through business angels or venture capital. A business angel is an investor or multiple investors who pull their research and resources to provide capital for the business. Business angels usually exchange capital for convertible debt or ownership equity. Venture capital is for fast growing companies. This is used to help enter new markets, expand sales or add new products. The last type, business relationship funding, can be used by joint venture and partnerships of two or more companies working together.

There are many different advantages and disadvantages amongst these four different types of funding. As previously stated, grants are the cheapest type of funding to come by. Unfortunately, there are limited categories of grants available for a startup business. Most grants are provided towards specific industries or aboriginal owners. The advantage of grants is the fact that it is free money. Once a business is awarded a grant and receives the money, the company is not required to pay the money back. The disadvantages of grants are, of course, the possibility of not getting rewarded the grant, having a limited amounts of grants availability for your...