Please respond to the following: Using the textbook, Strayer Library, and the Bachelor of Business Administration Library Guide, examine and explain two sources of outside equity financing and two sources of debt financing, that are available to entrepreneurs. Next, describe the source or sources you would use if you were creating a new company. Explain your rationale. Be sure to respond to at least one of your classmates’ posts. Pamela Thomas Hello Professor and class. A form of outside equity financing is equity capital which is when you receive money from selling part of your business. Another type of outside equity financing could be a loan from a family member even though the money is invested the investors will not have a part in running the business. It is equity because they have legal ownership of the business and investors because they are letting you use their money now to earn future wealth. Debt financing is a claim on the value of assets that a business owns. One form of debt financing is a loan from a bank. Debt financing is also backed up legally. It is a secured debt because the loaner can force you to pay off the debt. Another example of debt financing is unsecured debt. With unsecured debt, the loaners can not force the borrowers to pay back the investment. In creating our company we used gift financing and personal equity. My partner and I had our own personal business. So we were able to take profits from those businesses to start “Two Broke Teachers”. Our families have backed and encouraged us from the very beginning. It was only logical that we went back to the well, also we are working on writing grants. Our main goal is to acquire lines of credit with 60 to 90 net terms so far this has worked out well for us giving us time to sell and make the money before we have to pay it back out.

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