Course: Why businesses borrow money
14 minute read
Common sources of capital
In your quest for capital, you’re likely to try a few different strategies. You might already be familiar with some of these.
Borrowing from family and friends is a common way to access capital. You’re more likely to get flexible terms and avoid fees, but be sure to still treat it seriously. Including a formal agreement can help mitigate any potential tension.
Banks, online lenders and community lending institutions are all sources of small business loans. To qualify, you’ll typically need to show a track record of positive business revenue and have good credit.
You could get lucky and land big bucks from angel investors and venture capital firms. But you’re more likely to find investors in your local community who want to see you succeed.