THE NEED FOR FINANCE

Businesses need money for one or more of the following reasons:-

  • To put the basic infrastructure in place.
  • To get the trading activities of the business moving.   
  • To acquire capital equipment.  
  • To purchase inputs.  
  • To carry out marketing activities.   
  • To pay staff.


SOURCES OF FINANCE

There are several sources of financing that are available to entrepreneurs. These include:-

  • Personal: Savings, Assets which can be used as leverage in securing other funds. 
  • Friends and relatives: This is often called love money.   
  • Banks: Commercial and Development  
  • Credit Unions   
  • Partners  
  • Silent Partners: Own a percentage of the business but does not play an active role in the day-today operations. You are able to maintain control over your business
        Active Partners: Play a role in the business. 
  • Investors   
  • Suppliers   
  • Potential Customers   
  • Government Special Programmes



SOME THINGS TO NOTE WHEN DECIDING ON A SOURCE OF FINANCE

i. Loans from banks and Credit Unions must be paid back with interest over a predetermined time. You must not only have collateral but you must be able to repay the loan as well.
ii. Having a partner

  • Adds needed resources and skills to your business.   
  • Gives you someone with whom you share failures and successes.  
  • Prevents you from having full control of your business.


iii. Term Loans: taken for a specified period of time.
iv. Trade Credit: a supplier sells you products on credit.
v. Line of Credit: operates similarly to a credit card but has a lower rate of interest.



LENDING CRITERIA - THE FOUR C’S

  • Character: The financial institution assesses you and the business’s past financial history and credit rating.   
  • Capacity: The lending agency determines if the business is capable of making projected profits and marketing its products; Has a healthy cash flow and realistic projections.   
  • Conditions: General economic conditions.   
  • Collateral: Security against the amount of money that is borrowed. It can take the form of the business or owner’s assets.

Emergency Shelters 2017

Budget Address 2017

Carcip Project

Energy Unit

Argyle International Airport