what are the " sources of finance "for new businesses ? what are the ways you can raise cash for your startup?
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- The best sources of capital for a new business are: 1) Money saved from your day job. 2) Family and friends who know you and believe in your competence to succeed, and ability to pay them back. (This could ultimately end up in being the WORST finance plan). 3) Other people who have money to risk. Usually, this means incorporating and establishing shareholders. Lawyers cost money, and this should only be done if you have a track record that warrants other people investing in you and paying for your lawyers. 4) Mortgage your house. If things don't work out, you can always live in a car. (This is the absolute WORST idea.) Put simply, use free saved-up money that you don't need for necessities of life; build the business gradually and carefully, altering your business plan as circumstances change. If you show decent profits, many banks will give you lines of credit or loans to get you through tough times, cash flow problems, or to buy better production equipment. If you are in the United States, check out the Small Business Administration's financial services. But remember-- the purpose of a business is to make you money, not cost you money. All loans live in the debit column with the other liabilities. Good luck.
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