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All businesses regardless of size will need financing at some point. Whether it is a startup, an expansion, purchasing an existing business, or just helping out with cash flow financing will be an important part of your business at some time.
Debt financing includes many types of financing options. The one thing they all have in common is not giving up any ownership in the business and the funds must be paid back with interest. This allows you to keep control of your business but may cost more to repay.
Debt financing can be both short (30 days to 1 year) and long term (1 to 5 years). Short term is usually to cover short term cash flow bumps or expenses and long term would be more for larger expenses such as buying or starting a business.
You will need to qualify for debt financing by proving your credit-worthiness. This will include some kind of credit check and things like your business track record and financials, your bank history, how much of your own money you have invested and your ability to repay the loan.
You may also be required to secure the loan with a fixed asset such as property.
Debt financing can be a good choice if funds are needed quickly.
Can be obtained from several sources such as:
Equity financing is the world of venture capital and angel investors. When you give up equity in your business it usually means you also give up things like decision making and voting rights, dilution, valuation and exit methods.
Investors however can bring credibility and skills to your business that give you much more value than just the money. That and the fact you don’t have to pay back the investment may be just what your business needs to thrive.
Equity financing can take a lot of time and effort to find the people to invest. Our team at Gateway Business Brokers can help. We have a network of investors that we can contact if equity financing is needed.
Speak with one of our advisors today to get an expert opinion on the best way to finance your business expansion or purchase.
Helping our clients achieve the greatest success possible requires completing a transaction beneficial to both buyer and seller. To achieve that success, we work exclusively with well-qualified individuals, delve into the unique needs of both parties and develop a strategic plan that will help generate excellent results.
Gateway Business Brokers places a priority on open, frequent and comprehensive communication with our clients. We promise to communicate and confirm expectations in a timely and courteous manner each and every time.
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