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Business
Various types of loans are available, for someone to start a company, provided that person has a concrete business plan and can convince the lenders that their investment will be safe.
Debt Financing,Banks and other financial institutions are the prime lenders giving out such small business loans. There are two types of loans offered.Secured Loan:This is suitably guaranteed with collateral from the receiver of the loan so that the lender‘s investment is safe. The interest rate on such a loan is low.
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Unsecured Loan: This type of loan does not involve any security and has a high interest rate due to the high risk involved.Equity Financing,Some companies arrange for equity financing. These companies invite investors to participate in the business with their money, but investors demand a share in the profits and a say in the management of the venture.Loans can either be short-term or long-term depending on the need of the business. Companies can use lines of credit to generate funds. The other option is personal credit cards for small business ventures, but these are uneconomical due to the high interest rates involved.
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