Business Financing »

Business financing is a very generic term used to describe the variety of ways in which businesses and commercial enterprises are financed. Business financing includes debt financing, which entails securing business loans for a business payable over a certain period of time at a certain rate of interest, and equity financing, which entails investment made in exchange for equity in the business or commercial enterprise. These two types of business financing are dramatically different in that one requires sufficient cash flow to make regularly scheduled payments, while the other entails giving up some ownership of the business.

In addition to the equity debt distinction there are numerous other types of business financing, such as small business financing, large business financing, bridge financing and bad credit business financing. Small business financing, for example, could be in either debt or equity form, but must involve a small business of some sort. What defines a small business eligible for small business financing will be determined on a lender by lender basis. Regardless of the form in which it comes, financing a new business with start up business financing is essential to the growth and success of all businesses.