8 Sources of Capital for Entrepreneurs
- Self-funding
- Family, Relatives, Friends
3.Insurance Policies
4.Commercial Loans
5.Other Entrepreneurs –
6.Trade or Supplier Credit
7.Customers
8.Government Sources
using your own money
using your own money
using your own money
Family, Relatives, Friends
using money saved from insurance
Insurance Policies
borrowing from banks
Commercial Loans
partnerships or corporations
Other Entrepreneurs
buying materials now, paying later
Trade or Supplier Credit
pre-orders or early payments
Customers
government loans or programs
Government Sources
______means getting something now and promising to pay later.
Credit
the person who borrows
Debtor
the person who borrows
the person who borrows
Credit Has 2 Sides:
- Power
- Obligation
lets people buy without paying right away
Power
you must pay what you owe
Obligation
Characteristics of Credit (5)
- Risk
- Trust
- Elastic
- Creditor-Debtor Relationship
- Legal Obligation
The 7 C’s of Credit (IMPORTANT)
- Character
- Capacity
- Collateral
- Condition
- Capital
- Country
- Currency
Is the person honest and trustworthy?
Chracter
Can the person pay? (based on income)
Capacity
Can they offer something valuable if they don’t pay?
Collateral
Is the economy doing okay? (inflation, business climate)
Condition
Does the lender have enough money to lend?
Capital
Is the borrower’s country stable?
Country
Is the money (peso/dollar) stable, especially for foreign trade?
Currency
