Start up Business: What will Financing Realistically Cost?

If you want to start up a business, you are going to have to think about the impact of financing on your business. You need to consider what financing is realistically going to cost you.

Interest Terms

If you are using debt financing, you are going to have to think about how much the interest will cost you. Since the repayment will be broken up into many payments, you need to consider how much interest you are actually paying over the life of the loan. Over the course of several years, the interest on a typical loan will be thousands of dollars.

Equity

If you are utilizing equity financing, you are essentially going to be giving up a part of your business. If you take on a partner, you may have to give them as much as half of the business.

Control

When you utilize financing, you are also going to have to forfeit a certain measure of control over your business. If you use equity financing, your partners are going to have control over the business. If you utilize debt financing and do not repay the debt, the lender will assume control of your business and it will no longer be yours.

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