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Successfully Funding a Business Venture

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Usually, banks and other creditors are relatively reluctant to lend loans to startup businesses however all of our partners have sound experience and impressive professional credentials which would make the outlook of our future more viable. In case if we remain unable to raise loans through applications, personal properties of partners can be used as collaterals to raise loans. Where these loans are obtained for a longer period and provide suitable payback time to debtors, failure to pay back can lead to losing business as well as collaterals and incurring severe financial penalties with poor credit history affecting partners’ future credit status.

Almost all of our members use credit cards that offer short-term credit services against very low-interest rates, annual fees and have several perks and benefits that can be helpful in business purchasing and traveling (Bagley & Whynott, 1994; Fritzpack, 2013). This method also is fairly convenient due to readily available cash in hand and also less formal procedures in acquiring loans. However, this option provides a solution in the short-term only and hence can be used for operational expenses only with credit being paid off in the time limit specified by banks.

Failure to do so would lead to extremely high interest rates. There are several informal options available like using personal loans raised from family and friends, and peer-to-peer lending sites however inherent risks like spoiling one’ s relations, social support and goodwill may not make them the most appropriate options (Fritzpack, 2013). Out of these various options, raising personal capital is a more viable option. In all the options evaluated, there are either financial penalties or some form of interest and cost that would lead to an increase in expenses of our firm.

Since we are intending to control expenditure in the beginning, partners in the event management firm would have to come up with personal liquidated assets. This method is expedient, convenient and has a lesser cost involved. Although the risks of losing one’ s personal assets cannot be ignored cost-benefit analysis makes this option more appropriate than others.

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preview essay on Successfully Funding a Business Venture
  • Pages: 6 (1500 words)
  • Document Type: Essay
  • Subject: Business
  • Level: High School
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