Introduction to entrepreneurship/BMAN111/Financing/Video
If you need money to start your business, one of the first things you should focus on as an entrepreneur is understanding your options around raising finance. You (and any business partners) may have personal capital available to your start-up, but, in most cases, you will also need to consider other funding options, at least in the short term.
There are usually two main options for financing a business:
- Debt funding
- Equity funding
In simple terms, debt funding is when you borrow money from a bank or finance company (which you must pay back over an agreed period of time), and equity funding is when "investors provide money in return for a share of your company" . However, timing and the life-cycle of a new business is an important factor to consider when determining appropriate sources of funding.
The next video explains the phases of funding for growing a business.