Business Financing FAQ

Questions:

• How can I raise money for my business?
• What are the main differences between borrowing money and selling ownership interests in my business?
• How do business loans work?
• If I borrow money, what are my repayment options?
• How do I sell ownership interests in my business?

Answer:

If I borrow money, what are my repayment options?

If you decide to borrow money to raise start-up cash, there are a number of different ways you can repay it. The most common repayment schedule involves making equal monthly payments that incorporate both loan principal and interest. However, you can also make lower monthly payments for a short period of time, and pay off the remaining principal and interest in one large balloon payment. Or, you can make monthly payments of interest, and then make one large balloon payment of the principal and the remaining interest on a specified date. For more information on different loan repayment options, read Understanding Promissory Notes.