Hello there,A new business can obtain working capital from three broad categories and occasionally a fourth small one.First, the owners can provide the funds as part of what they invest in the company. Whether the form is stock, paid in capital or loans, it is part of what they invest. This category would include any private loans from friends or relatives of the owners who are willing to loan money to the owner so that the owner can invest it in his business.Second, the business can provide working capital through its operations. Frequently, a business will have a reserve for expansion, planned or yet to be planned. Third, the business can seek capital from third party lenders. These are the commercial lenders, folks who make loans to businesses as part of their normal business operation. They will require adequate property to be pledged to secure the loan.The fourth category is government grants. Under certain circumstances there may be government grants available to a business to use for a specific purpose that the government want to further, such as developing business in certain areas or developing certain types of new technology. This is not a broad category because the options are limited to what government programs may exist. This is also not an efficient source of general working capital for a business.Later,
Internally generate the funds. In other words, the company must finance its own expansion. Second choice: money comes out of your pocket to invest in expansion of your business.There is really no financing for small biz these days. That s why so many small businesses are going belly up so fast.
