Questions Business and Entrepreneurship

What is financial resources in business?

Airtract

Parvez Mehta

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Financial resources is a business that can be described as the money which a company or industry has which is available for spending. It can be in the form of credit lines, cash and liquid securities like stocks and bonds. It is essential that before engaging in any business, an entrepreneur must get the required financial resources to efficiently operate the business and also to have a shot at success. 

Where can a business secure its financial resources?

There are many possible sources of financial resources like: 

  • From the significant activities of a business like the sales of services and products. 
  • From external sources like issues of corporate bonds or bank loans. Especially since banks give out both short term and long term loans. 
  • Capital funding, which includes issues of capital contributions and shares. 
  • Kickstarter is a great project funding website. It is a crowdfunding site. Here business owners will have to create their profile pages which describe their potential business idea to initiate fundraising. People who donate funds receive rewards like being the first one to test a new product of the business. 
  • Kiva Zip is a program which not many know about, but this non-profit, community-based lending scheme allows business owners to access global capital. In Kiva, it is hour character and personality which determines whether you get to be financed or not. This is an excellent way for small businesses to secure funds. 
  • Kabbage is also a small business funding program. Here you will have first to submit your business application. It will then be reviewed so that the scheme can assess the total amount you can get. After this, you will get your working capital. kabbage doesn't focus on credit scores solely; they also look at other money transactions in other platforms like in the various e-commerce sites including PayPal. 

Apart from this, you can also reach out to family and friends, lease your equipment to get started as such. But there is one thing one must keep in mind, and that is to achieve the goals of any organization, it is vital that there is a good management system regarding financial resources. This is because a shortage of financial resources can severely compromise the abilities of a business to carry on its operations short term. But the excess of funds can also lead to a very high opportunity cost. So budget analysis and control play a critical role. 

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