Introduction To Types Of Small Business Finance

The best to place to start looking for small business finance is with the SBA. They have all kinds of financial assistance and grant programs for small business owners. Assuming there’s a need for financing from the commercial market outside of the SBA’s purview, outlined herein are a few basics about the options available to small business owners.

The most basic question that the business owner needs to ponder over is whether to opt for debt financing or equity financing. Each has its pros and cons and further sub-divisions in terms of types of financing. Which one is more suitable depends on factors such as the type of business, its age, cash flow and the credit rating and history of the owner.

Debt finance can be a loan, bond or line of credit from a bank or other lenders, or even a simple IOU. It is usually the best option when the business project is very specific and has a well defined timeline. The borrower needs to put up something as collateral as a form of security.

The owner’s credit rating and history will have a big impact on the ability to secure small business financing. The business also has to have a good enough cash flow (or projected cash flow) in order to meet the repayment schedule. It is important for the owner to do some business planning to figure out a feasible repayment period based on cash flow.

With equity financing, the owner offers the investor part ownership in return for cash. It has certain disadvantages such as loss of control, since the investor would like to a part of the decision making process. But unlike small business loans, equity investments don’t need to be paid back with interest, so it makes it easier to run the business.

The equity option is feasible for broad and long-term financing needs which have no specific and immediate timelines for an ROI. To be noted that equity investors seek higher returns, even if it is after a relatively longer delay. The owner is not likely to regain full control in the short-term and probably not even in the long term.

Equity investment can in the form of individual investments made on a personal basis by the owner, friends, family, colleagues or angel investors. It could be funding provided by a venture capital firm. Equity financing is more focused on the success potential of the project and does not require the kind of guarantees or collateral required for debt financing.

As mentioned above, the decision on debt vs. Equity will depend on the type of business, its current situation and the owner’s credibility. Too much debt is not good for the business, and neither is losing control entirely to equity investors. The right balance needs to be found, and this debt-equity ratio is different for different kinds of industries.

On a related note, it helps to have more options on how to use it to maximize the impact of the financing on the business. For instance, instead of purchasing equipment outright, it might be beneficial to consider equipment leasing finance. There are many more such things that need to be considered, and it is best to consult a lawyer or trusted banker for more information regarding suitable options for small business finance.

Why Yahoo Finance Is The Best Financial Website

Yahoo Finance is the best free solution for analytical Finance data on the internet. When I was a young Investment Banker, I used to use Yahoo Finance all the time to check on daily stock prices. It is absolutely great for young poor college professionals who don’t have much money and would like to learn more about Finance. If you cannot afford expensive data services like Bloomberg and still want to conduct basic financial analysis, then Yahoo Finance is for you.

Yahoo Finance can totally help you with many different tasks. You can get all the latest news on companies that you are interested in. Simply punch in the company’s ticker and get all the latest information about that particular company. It even works for mutual and index funds. If you are looking to study macroeconomic data or country specific currency data, Yahoo Finance can provide you with exchange rate data as well.

If you are looking to do financial modeling, you can get excellent historical data on Yahoo Finance about any company or mutual fund you choose. Then you can download the data in csv format to use with any spreadsheet program of your choice. This is a wonderful feature because it provides you with the very raw data you need to make a price graph. Then, you can use the graph to figure out future price movements, trends and shapes. This is incredible for any up and coming technical analyst.

Because Yahoo is strong in a lot of different countries around the world, you can even access international data concerning many emerging economies. So, if you are studying Asian or South American economies, you can now get good reliable data about these countries as well. Also, get historical currency exchange rate data that can be of great help when charting forex graphs and predicting prices.

The best feature in Yahoo Finance is the ability to create your own mock portfolios. You can now pick companies that you think will do well and create your own portfolio. Then, you can see if you would have made money using those decisions. You can buy and sell as many shares that you want depending on chosen price points.

You even get customized news alerts for the companies in your portfolio. I would recommend that you create as many portfolios as possible to learn as much as you can about different types of investments. This is also an excellent learning tool for those people who are looking to learn more about the stock market.

Yahoo Finance can be an absolute boon for anyone wanting to start out in Finance. If you are looking to learn how to go about conducting yourself in the market, then getting to learn the ropes is a breeze on Yahoo Finance. I would recommend the site to any newbie. It is truly an excellent offering from Yahoo and it comes at a great price: free. So go ahead and register yourself, get your own user name and password and you can be off on your own Finance adventure.