Unit 4 - Assignment 2

Unit 4 - Assignment 2 - U nit 4 Assignment 2 Running head:...

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Unit 4 – Assignment 2 1 Running head: UNIT 4 – ASSIGNMENT 2 Unit 4 – Assignment 2 / Business Funding David Lee Watkins American Intercontinental University Online
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Unit 4 – Assignment 2 2 Unit 4 – Assignment 2 / Business Funding There are several choices for funding the bookstore other than a rich relative. The first and foremost of these is by getting debt financing. Debt financing is a loan that you pay back on a schedule. These types of loans are commonly done by using personal credit cards, home equity lines of credit, commercial bank loans, and loans secured by the Small Business Administration. The best choice for the owners of the bookstore is the Small Business Administration secured loans; these loans have been designed specifically for the small business to use where they need assistance the most. The SBA loan is a guarantee to make a conventional loan to companies that might not be able to qualify for a traditional loan. These types of loans are used when the company does not have sufficient collateral to support the loan request. The SBA loan guarantee works as a substitute for collateral usually needed by the business owner, this guarantee will pay back the lender if the business owner fails to repay the loan. There are several weaknesses to using this type of loan for the small business. First,
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This note was uploaded on 05/04/2011 for the course BUS 105 taught by Professor Unk during the Winter '10 term at AIU Online.

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Unit 4 - Assignment 2 - U nit 4 Assignment 2 Running head:...

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