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Capital Business

Feb - 8 - 2014


Capital is essential for just about any business to get going. Whether it's a lemonade stand that requires some lemons, some water, sugars, and plastic cups; a small town's first boarding kennel, or a large-scale business, capital refers to the funds provided by the owners' personal accounts, from private investors and shareholders, or from traditional business loans - or from all three. Without capital, a lot of companies wouldn't be able to get off the ground, let alone succeed to the point that the owners are contemplating acquiring additional capital to grow the companies even further.

If you're in need of financing for your new or expanding business, consider first what you have personally available. Savings accounts, unused properties, the cashing out of 401ks and other retirement plans are all quick ways to get in the clear cash to use for your business growth needs. Personal loans from family and friends or even your bank are also choices, though of course there is interest to take into consideration.

You can also turn to shareholders. Shareholders generally require a share of your company (a share is essentially a percentage of ownership), as well as a guaranteed percentage of future earnings, and in return they will provide you with a gift of capital that does not need to be re-paid. But if you are not interested in sharing your company with stockholders, or your company isn't yet sufficient and profitable enough to makes shares even worth purchasing, consider one last option: capital from private funding sources.

Private funding sources include business firms and private investors who are actually not interested in owning even a small percentage of your company. Instead, they remain a silent partner, silently providing you with funds that you can use to grow your company. In return, you make quarterly or annual payments to them. The benefits here are clear: you receive funds to do what you want with, yet you retain full ownership of your company. Yes, you have to pay the money back along with interest, but because it is not a traditional loan, your company's value will not tank -- and thus you can seek out other capital-raising sources, such as the selling of shares, as your company continues to rise.

If private funding via a silent partner sounds most appealing to you, consider a private equity firm. These firms specialize in providing the capital that companies need for growth. Fund managers such as John Studzinski will thoroughly assess your company as it stands now, and as it might stand after you expand with acquired capital. Together you will come up with a sound business plan, and if all goes smoothly you'll be provided with the funds -- the private capital -- to make those plans come to fruition. Private firms have a lot of experience in funding start-ups and existing businesses alike, so no matter what your business' status is in terms of age or industry, with the right private equity funding, you'll be able to make your dreams of increased revenue come true.

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