Sources Of Capital

Question 1

How can entrepreneurs Raise Capital

Answer 1

Accumulated savings: Traditional and most common method.

Borrowing from family and friends: Accessible but limited.

Forming partnerships: Shared responsibility between partners.

Loans from banks and credit unions: Requires good credit, collateral, and repayment plans.

Debentures: Long-term loans requiring interest payments to investors.

Question 2

What is Collateral?

Answer 2

In business, collateral is an asset that a borrower offers to a lender as security for a loan.