MATTHEW P SCHULMAN | IMPORTANCE AND VALUE OF BUSINESS FINANCE
@REALLYGREATSITE
HOW CAN YOU START A FINANCE BUSINESS FROM A BASIC LEVEL?
BUSINESSES CANNOT BEGIN OR DEVELOP WITHOUT FUNDING. IN ACTUALITY, A LACK OF SUFFICIENT CASH (29%), AND A LACK OF MARKET DEMAND (42%), ARE THE TWO MOST OFTEN REPORTED CAUSES OF SMALL BUSINESS FAILURE.
LOOK FOR CASH FOR SEVERAL REASONS, ACCORDING TO
P SCHULMAN, SUCH AS:
Launching a new company Investing in equipment Working money Expansion/growth Purchasing an enterprise Refinancing/restructuring BUSINESSES
MATTHEW
FIRST GRANTS
Grants are typically given out by local economic development groups or government agencies at the federal, state, or municipal levels. They frequently demand a matching contribution of money or in-kind services and are frequently aimed at particular sectors.
The Bioscience Innovation Grant Program (BIG), Operation Intern, Innovate ND, and the Agricultural Products Utilization Commission (APUC) are a few examples of state grant programs, according to Matthew p Schulman.
2. DEBT-BASED FUNDING
In most cases, debt financing refers to credit that is given by banks, credit unions, or other financial lending organizations with predetermined conditions of repayment.
Matthew p Schulman says that the most popular loan kinds are long-term loans for purchasing fixed assets and short-term loans and lines of credit for funding cyclical or one-time demands like building or inventories.
TYPICALLY, LENDERS USE WHAT IS KNOWN AS THE "5 C'S OF CREDIT" TO ANALYZE LOAN REQUESTS.
Capital (borrower equity investment, generally cash) (borrower equity contribution, typically cash)
Capacity (adequate cash flow to repay the debt) (sufficient cash flow to repay the loan)
Collateral (assets that provide a supplementary source of repayment) (assets that provide a secondary source of repayment)
Conditions (may include loan terms or market conditions) (may include loan terms or market conditions)
Character (credit score, industry and business expertise, drive to achieve) (credit score, industry and business experience, drive to succeed)
3. FINANCING OPTIONS
For several reasons, including a lack of cash or collateral, to gauge market demand, or to generate presales for a product launch, founders may resort to alternative financing (an alternative to banks and credit unions).
4. INVESTMENT IN EQUITY
In equity financing, often known as venture capital, money is raised by giving investors ownership stakes in the business, generally in the form of preferred stock. Family members, close friends, and accredited angel investors (or angel funds) who can use their contacts and industry knowledge to grow the firm are frequent candidates for investment.
ENTERPRISE PLAN
Having a business plan is essential whether a small firm is looking for funding through grants, debt, or equity investment. According to Matthew p Schulman, a business plan can take many different forms, from a one-page plan (Business Model Canvas) to an investor pitch deck to a full plan that often contains a narrative part, financial predictions, and an appendix of supporting papers, depending on the goals and audience.
THANK YOU
