Operating Capital Business Funding and Finance

Sources of Operating Capital


If you have looked for Operating Capital to expand your business or maintain your operation until you can qualify for Bank Financing, you may want to look into some of the alternative forms of financing. There are many more than those listed here, but these are a good start.
The following table shows some information about the Major Sources of Capital such as: 1.)Type of Cashflow, 2.)Cost of Money, 3.)The Application Process, 4.)Potential of Growth with each type, 5.)Loss of Control (or not) of your company, 6.)Importance of Your Personal or Business Credit, 7.)Whether or not a Personal Guarantee is required, 8.)Which (if any) Liens are created, 9.)Whether Debt is incurred on the Balance Sheet and 10.)Whether they may be used along With Other forms of Financing.
Cash Sources
Cashflow
Cost of money
Application
Process
Growth
Potential
Loss of Control
Bus./Pers.
Credit
Personal
Guarantee
Liens
Incur
Debt
w/ Other Financing
Wall Street (IPO)
Ongoing
Inexpensive
6 to 18 Months
Unlimited
Some
Unimportant
None
None
N/A
Yes
One Time
Fairly Inexpensive
1 to 3 Months
Limited
No Loss
Very Important
Usually
Yes, Everything
Yes
Usually Not
Loans
Ongoing
Fairly Inexpensive
1 to 4 Weeks
Unlimited
No Loss
Important
Often
Yes Varies
Yes
Yes
Ongoing
Expensive
1 to 3 Weeks
Unlimited
No Loss
Unimportant
Not Usually
Receivables
No
Yes
Ongoing
Competetive
48 to 72 hrs.
Unlimited
No Loss
Unimportant
None
None
No
Yes
One Time
per Lease
Moderate
1 to 4 Weeks
Nearly Unlimited
No Loss
Somewhat Important
Not Usually
Equipment
No
Yes
Sale Leaseback One Time Moderate 1 to 4 Weeks Limited No Loss Somewhat Important Not Usually Equipment No Yes
Using CreditCards
Ongoing
Expensive
1 to 4 Months
Very Limited
No Loss
Important
Always
None
Yes
Yes
Accepting CreditCards
Ongoing
Expensive
2 to 10 Weeks
Unlimited
No Loss
Unimportant
None
None
No
Yes
Ongoing
Moderate
2 to 4 Weeks
Unlimited
No Loss
Important
None
None
No
Yes
Bad Debt
Occasional
N/A
1 to 4 Weeks
Limited
No Loss
Unimportant
None
None
No
Yes
Bridge Financing
One Time
Very Expensive
5 to 10 Days
Limited
Often
Important
Always
Yes
Yes 
Usually
Varies
Very Expensive
3 to 60 Months
Varies
Almost Always
Important
Usually
Often
Yes
Usually
Ongoing
Use Other Peoples $
2 to 12 Months
Can Be Unlimited
Very Often
Unimportant
None
N/A
N/A
Yes
P/O Funding As Needed Very Expensive 1 to 4 Weeks Unlimited No Loss Sometimes Important Often Often Yes Yes
* Term Allowance Drafts     **Consumer Installment Contracts     ***After Collection

These are some of the sources of Operating Capital or Financing for companies to keep their doors open and/or to grow and expand.

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