What is Small Business Financing?

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business financing

Small business financing or franchise financing involves business owners securing funds to start a new business or support current or future business functions like hiring new employees, purchasing inventory, refinancing debt, or meeting short-term cash flow requirements.

Small businesses raise money either through equity financing or debt financing. Under debt financing, business owners borrow money from a bank or other financial institution, which will be eventually paid back with interest. Equity financing involves receiving funds from an investor and the ownership of business is traded in return.

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