Writing Resources
Common Sources of Funding Available for Entrepreneurs A common source of funding includes private investment banks personal savings and assets friends family members corporate funding and grants Advantages and Disadvantages of Funding Sources Whether you re funding a new business or trying to expand an established business choosing the right source of financing for one s situation can be challenging While you can choose from several options each source of funding comes with its own set of advantages and disadvantages Jennings R 2018 The advantage of borrowing money from a bank is that it allows you to keep your cash on hand to use as operating capital or for personal survival during slow times in your business You may be able to protect your most important personal assets by declaring bankruptcy in the advent the company is unsuccessful The disadvantages are that you ll have to pay interest on the loan Your payments will be due on time regardless of whether the business is doing good or bad Jennings R 2018 The U S Small Business Administration SBA offers several loans and grant programs to help startup companies and assist existing businesses to expand Grants are free money and government guaranteed loans come with interest rates that are typically lower that you can get on your own Jennings R 2018 Disadvantages are that they come with a lot of red tapes and may not be available for every type of business Budget issues from year to year may affect the availability of funds
