10 Common Sources Of Business Funds Friendly money. Friendly money sources include yourself, mom and dad, relatives and friends. This is one of the quickest, cheapest and easiest financing methods, especially for new start-ups. You must be willing to pledge your personal assets to secure a bank loan.
Banks look for both primary and secondary sources of repayment.
Finance companies are primarily asset-based lenders, extending financing against receivables, inventory, equipment and other hard forms of collateral. The most common type is a bank loan for which the SBA guarantees a large portion, typically 70 percent to 90 percent. The SBA in turn will require that the loan be collateralized with personal commitments from the principals. Leasing companies loan to businesses for the purchase of automobiles, trucks, computers, office furniture and other equipment to help offset the initial outlay of cash for major purchases. Entrepreneurs usually are required to provide a personal guarantee to secure the lease.