Main types of Finance
It takes money to make money. So what sort of finance options are out there? Here are the types of finance that fund most businesses.
1. Debt (loans)
2. Equity financing (investors)
Where the public can invest in your business
Individuals who invest their own money
Professional investment groups
Friends and Family
When those close to you buy into business
The type of finance you choose matters
Each finance type has its own pros and cons. Use this guide to learn about them. Ask which suits your business, and you as a person – because that matters too.
Begging, borrowing and bootstrapping
Other businesses start out really small, with minimal money, and build slowly. This is often called bootstrapping. In these cases, it’s common for owners to cobble together their own finance through personal savings, personal loans, or taking extra shifts at their day job. Even if you’re doing that, it’s worth knowing about the types of finance out there. You may just need an extra injection of cash down the road to get the business truly humming.
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