1. C. Financing a Small Business 4.00 Explain the fundamentals of financing a small business. 4.02 Discuss sources used in financing a small business.

2. How are you going to finance a small business? Equity sources: Money or capital contributed by owners; capital sources that trade cash for some portion of ownership or equity in a business.

3.  Personal savings  Friends and relatives  Partners  Private investors  Venture capitalists  State-sponsored venture capital funds

4. How are you going to finance a small business? Debt sources: Money or capital that is borrowed and must be paid back with interest.  Banks  Trade credit through vendors  Finance companies  Credit unions  Government agencies

5. Process for getting a loan Select the bank carefully. Prepare financial statements and a business plan. Make an appointment. Prepare to answer questions.

6. Types of loans available Secured Loans Short-term loans Lines of credit

7. Entrepreneurial characteristics needed to obtain financing  Character  Capacity  Capital  Collateral  Conditions

8. Factors to consider when choosing a financial plan Risk Control Availability