| NEW! FREE Do-It-Yourself Press Release Kit Get It Now (Adobe PDF) |
Close This Window
Free Do-It-Yourself Press Release Kit
Fill out the information below to receive our free e-book. We'll automatically redirect you to the download area.
Close This Window
On Capital and Why It Is Essential in Starting and Operating a Business
by: johnlair on
Date: Mon, 13 Dec 2010 Time: 2:28 PM
It is virtually impossible to start a business without capital. It is through capital which enables a business to acquire its initial assets that are vital to make it operational and profitable. When the business has already established itself, capital is still needed for its expansion and operation.
An entrepreneur can obtain funding that can be used for business capitalization from a variety of sources. The idea about the business can be sold to family, friends and other individuals who can become potential investors, who will eventually pour in part of the funds that will be used as capital. A portion of the businessperson’s savings can also be tapped as capital for the venture.
However, there is no more convenient and more stable source of funds for capitalization than loans. Loans are types of debts wherein the borrower initially receives money from a creditor and promises to pay the creditor the said amount at a later time. Loan payments can be done depending on the agreement between the borrower and the creditor but most of the time; they are being done in several installments.
There are two types of loans that an entrepreneur can obtain. The first type of loan is secured loans, which are being usually extended to borrowers by banks and leasing firms. The other type is unsecured loans, which are usually being issued by non-banking financial institutions.
The basic difference between secured loans and unsecured loans is the type of protection that each of them offer to the lender. In secured loans, the lender requires the borrower to submit an asset that can be used as collateral, which is an instrument that serves as the lender’s protection in case of borrower default. On the other hand, unsecured loans do not require collateral, which makes them very convenient to entrepreneurs who are in need of quick cash to launch a new business or sustain current operations.
Whether the funding comes from unsecured loans and secured loans, from a portion of the savings, or from the investors, capital will always play a vital role on how the business will perform. A well-capitalized business has more chances of succeeding, bringing in profit and a feeling of fulfillment to the businessperson who risked; and invested time, effort and money into the business. Capital is surely the blood that flows within a business’ veins and makes it live.
About the Author
Don’t forget to visit http://www.merchantcashadvance.com for details.
Rating:
Not yet rated
Login to vote | Not Registered?
Create an account
Comments 
No comments posted.
Add Comment
You do not have permission to comment. If you
log in, you may be able to comment.
