Question

Assume you have created a business. Now you are going for expansion. Explain in detail the Sources of External Funds for your Businesses.

Answer 1

Explanation:

There are a number of advantages to using the various methods of bootstrap financing:

Your business will be worth more because less money has been borrowed, and therefore, no equity positions had to be relinquished.

You won't have to pay the high interest on borrowed money.

Coming from a stronger position (with less debt on hand), you look more desirable to external lenders and investors when the time does come to raise money through these routes.

You can be creative in finding ways to raise profits, without having to look to external sources. It will give you the added confidence of business savvy.