Essay on Funding a Business

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When funding the growth of a business such as a bed and breakfast there are a few different ways that should be considered. The first way that is very common is to take out a bank loan. Most banks will require that you have a thorough business plan to present to them. This would include such information as the company over view, mission statement, competitive analysis, as well as current and future financial plan break downs. It is also important that whoever is taking out the loan have a good credit history so that they can receive the most favorable loan rates. A second method to fuel a star-up and its growth would be to research and apply for government grants and loans. A grant might be issued to spur economic growth or boost businesses in certain industries in the local area. There also exist microloan programs that help small businesses with start up and expansion. A business will have to go through an intermediary lender to see exactly what requirements need to be met in order to be eligible. This could potentially help our business with the working capital needed for furniture, supplies, and inventory. The Department of Veterans Affairs also works with the Small Business Administration to offer several loan programs to prior military members. This might also be very beneficial because of potential low-interest loans and the and down payment advantages. There is also the possibility of finding venture capitalists or angel investors. These methods usually can take longer to come to agreements and to get all the paperwork in order. Venture capitalist is people who pool their money to invest in a new business idea. This might not be the best idea for our business since we might need to give up ownership, agree to undesirable terms and repayments, or be faced with a conflict of interest with the potential investor. Angel investors invest their money from personal funds in companies that they deem might have potential. Normally they look for companies that have a bigger profit potential or that can even be taken public in the future. Because they are mainly concerned with making a profit and protecting their investment they might want to control and influence how our business is
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