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:

How can I raise money for my business?

The main ways to raise money are borrowing it from a friend, a family member, or a commercial lender, or selling ownership interests (equity) in your business. There's no hard and fast rule about the best way to raise money -- you'll have to evaluate your situation and decide what kind of loan or investment you're willing to take. (Also, of course, whoever loans or gives you money will have some input, too.)

If you'll be going beyond family and friends for loans or equity investments, you'll need a business plan. For more information, see  Business Plan FAQ.