1 / 8

BUTTERFIELD BANK PRESENTATION TO BUSINESSES “Approaching Your Bank”

BUTTERFIELD BANK PRESENTATION TO BUSINESSES “Approaching Your Bank”. October 2008. EQUITY VS DEBT FUNDS. Equity Funds

basil
Download Presentation

BUTTERFIELD BANK PRESENTATION TO BUSINESSES “Approaching Your Bank”

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BUTTERFIELD BANKPRESENTATIONTO BUSINESSES“Approaching Your Bank” October 2008

  2. EQUITY VS DEBT FUNDS • Equity Funds • Comes from selling a portion of the business to yourself or another person. The amount you have to sell to acquire the needed funds reflects the amount of risk that the investor perceives. • Debt Funds • A loan, usually from a bank that the lender expects you to repay at some determinate time. The lender will ordinarily receive a return for the use of the funds in the form of interest. The interest rate reflects the lender’s perceived risk.

  3. START UP BUSINESSES • Challenge of obtaining equity • Sources of equity • Personal savings • Co-owners • Friends • Family • Angels • Access to equity is somewhat limited

  4. Equity Funding • Advantages: • Investors may offer valuable advice and assistance. • You can be flexible about repayment requirements. • In the event of business losses, you may not have to pay investors. • Disadvantages: • -Investors require a greater share of profits than interest on a loan. • -Investors can sue you. • -Investors have to be informed of significant business events

  5. Debt Funding • Advantages: • Only obligation to lender is to repay the loan on time. • The lender has no management say. • The lender has no direct entitlements to profits in your business. • Disadvantages: • -You may have to assign a security interest in your property. • -You can be sued personally.

  6. EIGHT OF THE MOST COMMON MISTAKES MADE BY ENTREPRENEURS • Failing to borrow funds • Overlooking available financial resources • Underestimating financial risks • Ignoring the downside of having investors • Making unrealistic estimates of borrowing potential • Neglecting to manage lender relationships • Preparing a loan application under pressure • Failing to forecast cash needs

  7. Five Helpful Tips! • Research what grants and outside support are available. • Make sure your business plan and financial projections are well thought out. • Always ask for enough finance. • Maintain quality financial information. • Bring all relevant supporting documentation.

  8. Yes!

More Related