Finding a Source of Finance for Used Book Store
The partners of the Used Book store are looking into other logical sources of funding for their business. Currently they are receiving funding from a rich relative. For independence, longevity, and success, they feel they need to research other avenues of funding. There are several different types of funding available to them, but they must decide which source would best suit their needs, whether it is remaining with the rich relative or some other source.
Trade credit (open-book credit), credit cards, and SBA guaranteed loans are all types of funding available for small businesses (Ebert & Griffin, 2005). They will need to compare other sources of funding with the benefits and risks involved with remaining with the rich relative.
Trade Credit
Trade credit is the credit extended to businesses by suppliers who let them buy now and pay later. The advantage of trade credit is the ability to take delivery of materials, equipment or other valuables without paying cash on the spot. The practice of trade credit can also help to establish a good working environment between suppliers and the business.
Most suppliers unfortunately will not offer trade credit to a new business that they have not established a working relationship. They will demand payment by cash or check on delivery, or payment by credit card in advance until the business has established that they can pay their bills on time (Entrepreneur, 2008, ¶ 2).
Credit Cards
Credit cards are a convenient and easy way to pay for supplies, material and equipment necessary to start a business. There are several banks that offer business credit cards with different benefits such as reward points, no annual fee, low introductory annual percentage rates, and cash back rewards on purchases (Bankrate, Inc, 2008).
Credit cards may be too convenient to some business owners who do not manage their
finances well. “Many business owners borrow heavily on their credit card only to find
themselves up to their ears in debt. Credit cards are one of the most expensive sources of cash
and have paved the road to bankruptcy court more than once” (Pinson, 2006, p. 143).
What really makes credit cards attractive is that they are not hard to acquire. The two main things that credit card companies look at when issuing credit is personal credit score and established credit of the business owner or owners (Wade, 2006).
SBA Guaranteed Loans
Aside from the loan programs mentioned above, there are many others available for prospective entrepreneurs. As the country 's economy slowly rises out of the shadows of recession, this is exactly the kind of assistance small businesses need to succeed and prosper. Now, which types of SBA financing programs appeal most to your entrepreneurial preference?
This memo is in response to the views of the Inglis University Library donations department. The idea of the this case is to help readers develop a better understanding of what the donations department of the library are being used for and what the effects are of those decisions. For example, the donations can be used to hire part-time employees to help keep up with the growing number of books. However, the increase in books and profit has increased unit cost that was claimed to be already too high. The case helps to comprehend cost concepts and how to organize it into data for proper analysis. This memo will explain how to analyze and evaluate the costs and then explain the results in a managerial way whether or not the additional funds should be rejected.
Opening a restaurant can be expensive with the current average start costs coming in around half a million dollars. We can expect to reach or exceed those start-up costs due to the higher-than-average cost of living in the Northern Virginia area. The causal environment we seek to portray will mitigate some of these costs, but top notch talent is expensive. We already have some funding, and a few investors, but we will need to get a large amount of financing from other sources. Being a Military veteran, and my wife being a female minority, we are optimistic about getting the small business loans
It is helpful to carry only one or two credit cards that are limited to 20% of their annual income, remembering to pay balances. in full every month. This way the consumer is not heavily distressed. by sudden huge debts. Also, sometimes, it’s not so smart to purchase.
money to put food on the table one day and the next day they might not have any
off their holiday expenses. Unfortunately, there are more ways to use a credit card than ever before, making it very hard
Credit cards are something that are almost needed in everyday life now, as most dont have the money available to purchase a car or house and so need credit, thus needing credit cards to help build that credit. Those cards are hard to handle, and receiving applications in the mail daily, and commercials appearing on television don’t seem to make the struggle of staying away any easier. This starts to spark an interest. So people begin to think, "I think I 'm responsible enough to get a credit card, I 'll only use it for emergencies." Then the application process begins and it may take a couple times to finally be approved for one. This only makes it worse, of course, because realizing how long a credit card wasn’t applicable to life, but now
We live in a world that focuses on instant gratification. We compare the bounties and prosperity of others to ours and end up focusing on our ‘have nots’. Focusing on what we don’t have usually only makes us want it more and when we want it bad enough, we will take almost any action that doesn’t seem life threatening or that we think would cause immediate harm. So, many people often find themselves borrowing money to close the gap between what they have and what others have. As a result, many people are
There is a range of criteria relevant for a decision of financing a new venture. To construct my list for the evaluation of a new company as an opportunity I have selected to refer to t...
Thesis: Businesses deem financing necessary when they are just beginning, expanding, or recovering; Debt financing and equity financning have many advantages and disadvantages but also change the entire accounting method that is to be considered while running the business.
Adelman, P. J., & Marks, A. M. (2010). Entrepreneurial finance. (5 ed.). Bedford, Texas: Prentice Hall.
Ochse, G. (2013, August 15). Things to think about when buying a business. Finweek, 51. Retrieved from http://web.b.ebscohost.com.ezproxy.denverlibrary.org/ehost/pdfviewer/pdfviewer?sid=c4507653-e8f4-4f58-8882-d5d970a15628%40sessionmgr110&vid=2&hid=103
Suffice it to say that properly managed credit card use may improve your credit rating, and responsibly using XXXXX may help you improve your credit rating with your credit card.
By offering consumers both a means to pay for goods and services and a source of credit to finance such purchases, credit cards have become the most widely used credit instrument in the United States. As a payment device, credit cards are a ready substitute for checks, cash, and debit cards for most types of purchases (Federal Reserve, 2013).
Credit card debt is a big problem in America. America is becoming a materialistic place.