Forms of Short-term Financing/Equity Investment

Unit 7.1-Forms of Short-term Financing

Introduction | Preparing to Borrow | Vendor Financing | Documentary Collections | Bank Check | Personal Resources | Bank Financing | Export Credit Insurance | Guarantees | Ex-Im Bank Financing | SBA | Equity Investment | Earnings Requirments | Working Capital | Collateral | Resource Management | Primary Differences | Factoring | Forfaiting | Summary | Resources | Activities | Assessment Return to International Finance Module 7: Short-term Financing

Equity Investment

Business loan applicants must have a reasonable amount invested in their business to ensure that, when combined with borrowed funds, the business can operate on a sound basis. There will be a careful examination of the debt-to-worth ratio of the applicant to understand how much money the lender is being asked to lend (debt) in relation to how much the owner(s) have invested (worth). Owners invest either assets that are applicable to the operation of the business and/or cash which can be used to acquire such assets. The value of invested assets should be substantiated by invoices or appraisals for startup businesses or current financial statements for existing businesses.

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External Resources

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