Sources of Capital Funding for Businesses


Looking for Capital?

Finding capital funding for a new business or to grow your existing business can be a daunting job.  But unless you plan to fail, you will have to make arrangements to have capital on hand to pay for unexpected expenses and to make it through slow seasons.  The simple fact is that businesses without sufficient cash or other liquid assets at the outset often fail within the first two years.

The best business plan is a well-researched one, and you may have to dig through a lot of resources to come up with a reasonably reliable figure to represent the amount of money, or capital, you need to get your business off the ground or to grow.   Your options for sources of capital will vary depending on the amount you need.

For instance, your own savings or low-interest loans from family members may be one of the easiest sources of business capital you can secure.

Another option may be a home equity line of credit, the repayment of which would be secured by your home.  If considering this option, be sure you (and your spouse) are willing to put your home at risk for the business.

Unsecured loans are another alternative that usually represent less risk to the borrower, but higher risk to the lender.  Unsecured loans generally cost more in higher interest rates.

Investors are another potential source of capital.  By giving investors a piece of the ownership pie, a business can benefit from a much needed cash infusion.  Such investors are sometimes referred to as venture capitalists, and this type of financing is known as equity financing.  Be aware that investors often require a management role as a condition of investment.

If you are in the market for capital funding, be sure to seek the advice of experienced legal counsel before you sign any contract with a proposed lender or investor.  At Scolieri Law Group, P.C., our experienced business law attorneys can help you evaluate your capital funding options, draft or review contracts, and offer legal assistance in all other aspects of starting or growing your business. Contact us today at (412)765-0546 or info@scolierilaw.com.