Continued from page 1
Banks are one of most common sources of debt financing. There are many other sources for debt financing including: savings, loans and commercial finance companies. It is also possible to ask for funding from family members, friends or colleagues, especially when capital requirement is small.
Traditionally, banks have been major source of small business funding. Their principal role has been as a short-term lender offering demand loans, seasonal lines of credit, and single-purpose loans for machinery and equipment. Banks generally have been reluctant to offer long-term loans to small firms.
In addition to equity considerations, lenders commonly require borrower's personal guarantees in case of default. This ensures that borrower has a sufficient personal interest at stake to give paramount attention to business. For most borrowers this is a necessary evil.
You may freely reprint this article provided author's biography remains intact:
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.