Getting financing Essay Example | Topics and Well Written Essays - 1000 words

Getting financing - Essay simulationThe inadequacy of working chapiter has prevented many companies from exploiting likely market opportunities that are available to them. This paper tends to look the scope of raising finance for my production line JBR Watches located in Los Angeles. Obviously, it is difficult for an entrepreneur to meet all told capital requirements for business expansion all by oneself. Hence, for opening a showroom in Los Angeles, I should seek various sources of financing. At this juncture, it is important to identify significant tactics that an entrepreneur can initiate. The well-nigh notable factor that denies a firms access to financial sources is its negative market stature. This heavy(a) situation can be changed if the company deals with large contracts because they offer comparatively higher network. At the similar time, majority contract terms insist that the supplier must provide 30 to 60 geezerhood for the client to pay his invoices (Burstnet) . So as to meet these credit requirements of the customers effectively and to earn more profit from large business contracts, it is advisable for the JBR Watches to try for venture capital. Venture capital is an option for exquisite companies that sustain innovative business plans but have no adequate operating finance (venture capital). Generally, venture capitalists would not be willing to invest their money in risky ventures hence, the JBR must formulate effective business designs in order to convince the capital provider about the capablenessity of its business. Even though, venture capital is offered for a short period of time, JBR can make returns within this period and repay the amount onwards the maturity of the stipulated period. Similarly, my company may seek hangance from angel investors. An angel investor maybe a wealthy individual or group of individuals who wish to invest in pre-venture capital companies with the objective of uplifting original communities (Ange l Investors). In the case of JBR, the management can highlight the growth requirement of employees community and it may embolden the firm to get financial assistance from angel investors. So as to find a potential angel investor, JBR can employ the internet tools like Google search engine. According to Carbajo (2011) bank is another potential financial source for e truly business. However, it is observed that the banks do not provide loans and other credit facilities to venial companies unless the companies possess substantial assets and all other financial records. Although JBR Watches is a notable concern in the industry, its decrease growth rate would not satisfy the banks credit criteria. In the opinion of Yates, banks provide credit facilities to small companies also if the business owners personally guarantee the credit repayment. This type of fund raising is a very risky practice for small companies if the business does not realize anticipated profit and the owner is unef fective to repay the loan amount. Therefore, JBR must be very careful while applying this tool. Use of credit account is another method that can effectively contribute to the working capital requirements of JBR Watches. Credit cards assist the card holders to make purchases or obtain cash advances and pay them later. Business owners must note that ascribe cards are very expensive source of funding even if it has reasonably low bear on rates. As in the case of bank lines of credit, the business owner personally guarantees the debt repayment while employing this proficiency also. Therefore, this