There are three major reasons why businesses borrow:
- Purchase assets. A loan to acquire assets could be for buying short-term or current assets – such as inventory – and would be repaid once the new inventory is converted into cash as it is sold to customers. Or, the funds could be for the addition of long-term, or fixed, assets, such as equipment.
- Replace other types of credit. For example, you may wish to use the funds to pay suppliers more promptly to get a discount on the price of the merchandise.
- Replace equity. If you wish to buy a partner’s share in your business but you don’t have the cash to do it, you may consider borrowing.
While the Longwood SBDC does not provide financing, we have professionals who can help you:
- Identify equity financing options
- Structure the financing
- Identify sources of funding
- Prepare financial projections
- Analyze financials and compare to Industry Standards
- Prepare business valuations
- Provide accounting guidance
- Access expansion capital
Unfortunately, grant monies are usually not available, with a few exceptions of high technology businesses. For additional assistance visit the U.S. Small Business Administration or Grants.gov website.
To learn more about financing your business, contact your local Longwood SBDC to schedule a no-cost, confidential consultation today!
The Entrepreneur’s Business Planning Guide is a comprehensive, user-friendly workbook for creating a formal business plan.
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