This fact is one reason why iHumanEvolution.com crowdfunding investor networks have enabled small business entrepreneurs to succeed. CALL 971-258-5047 or Visit website: http://ihumanmedia.com/
The iHuman crowdfunding package is a cost effective $675.00 flat rate. The four point strategy to raising money using network funding and sales opportunities is the next generation in business paradigms. The results can draw anywhere from $5,000 up to $150,000 (USD) in seed money to fund your goals.
Before you seek startup capital, organize your records as follows;
- Gather you’re financial business records including tax returns
- Speak with business partners or family members about the sometimes uncomfortable option of giving up partial control of the business to potential investors
- Request copies of your personal and any business credit reports
Entrepreneurs who seek financing face a fundamental choice: Should they borrow funds or take in new investment capital? Since debt and equity are accounted for differently, each has a different impact on earnings, cash flow, and taxes. Each also has a different effect on leverage, dilution, and a host of other metrics by which businesses are measured. The planned use of funds will also affect the choice of financing, with one option more appropriate for certain uses than the other.
Debt can be a loan, line of credit, bond, or even an IOU -- any promise to repay borrowed amounts over a certain time with a specified interest rate and other terms. Debt is accounted for as a liability of the company, and interest payments are deductible business expenses. In the event of bankruptcy or insolvency, debt holders take priority over equity holders.
For a small business, debt financing has both advantages and disadvantages. On the plus side, debt can be relatively simple to secure through a bank or other financial institution and is available with a broad range of terms, allowing you to customize the debt to meet your specific needs. And since most debt entails regularly scheduled payments of interest and often principal as well, debt is easy to plan around. Perhaps most important, debt, unlike equity, will not dilute your ownership interest in your company.
On the minus side, however, financing with debt can be more expensive, and you will have to meet scheduled interest and principal payments regardless of your cash flow. Although loan terms can be negotiated to build in flexibility, ultimately the money must be paid back.
Debt is most often used to fund a specific project or initiative that has an identifiable implementation time frame. It's also used as a cash flow backup in the form of a revolving line of credit. To attract lenders, you will need to have a good personal and business credit history, sufficient cash flow to repay the loan, and/or sufficient collateral to offer as a second source of loan repayment.
Equity differs from debt in that it represents a permanent ownership stake in the company. When you finance with equity, you are giving up a portion of your ownership interest in -- and control of -- the company in exchange for cash. Equity investors may demand dividends or a portion of annual profits. But most investors in small businesses seek long-term capital gains on their investment, meaning that at some point these investors may look to opt out. This can mean the eventual sale of the business or the need to bring in replacement investors in the future.
Traditionally, the most common sources of equity financing for startup entrepreneurs are personal savings or contributions from family, friends, and business associates. However new advances in micro lending and crowdfunding like the iHumanEvolution.com package has expanded the ability of ordinary business entrepreneurs to reach potential investors locally and worldwide.
For business funding over $500,000 or more venture capital or seed money companies can also be sources of new capital, although they generally deal in higher end financings equity deals. If your business is incorporated, anyone contributing equity capital would receive shares in the business. If it is a sole proprietorship or a partnership, they would receive an ownership share of the business.
While equity financing can be used for many different purposes, it is usually used for long-term general funding and not tied to specific projects or time frames. The major disadvantage to equity financing is the dilution of your ownership interest and the possible loss of control. Moreover, equity investors in smaller businesses generally look for high returns over time to compensate for the risk.
In practice, most businesses use a combination of debt and equity financing. The concern is getting the right balance. If you have too much debt, you may overextend your ability to service the debt and can be vulnerable to business downturns and changes in interest rates. On the other hand, too much equity dilutes your ownership interest and can expose you to outside control.
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iHuman Media of Portland Oregon has provided sustainable business services for hundreds of entrepreneurs, corporations and non-profit organizations. Over 18-years experience for the best value in truly sustainable business development that delivers tangible returns on investment. Get Started CALL 971-258-5047 or Visit www.ihumanmedia.com