our newly purchased business may not be your cup of tea, so choose your type of financing wisely. Some traditional sources of capital include yourself, family and friends, commercial banks, loan companies, insurance companies, credit unions and private investors. The old saying, "don't mix business with pleasure" is applicable when dealing with family and friends. Taking a loan from these sources can cause turmoil if the loan cannot be paid back. Banks are the standard for business lending. "The amount they charge is based on two factors: the size and history of the customer and the risk the bank will take in providing the loan."(Fallek, 85) If you are able to decrease the bank's risk and have a standing credit line, you will get the most out of your loan. The other types of traditional lenders are less frequently used, but are also good sources of capital. "Nontraditional money sources are unlimited in number and type, but you need to be creative to acquire the necessary funds from them."(Fallek, 89) These sources include customers, suppliers, leasing companies, local development companies, and advertising for money. Customers or potential customers are often great sources of funding, as well as suppliers. Suppliers will furnish you with the necessary equipment and product. Leasing companies and local development companies are also good nontraditional sources of capital. "You can actively seek funding by running a display advertisement in the business section under the appropriate heading in the classified ads of your local newspaper. Specify the amount of money needed and the type of business for which it will be used."(Fallek, 91) Yet another source for funding might be through the Small Business Administration. They offer different types of loan programs to small businesses. The SBA Guaranteed Loan Program grants a loan on the basis that the individual needs more time than allotted by other lenders to pay back the loan, has insuffic...
