Finance 101:

Here are some guidelines on how, when, where and why you can get financing.

It's up to you to directly approach any financing parties, intermediaries or other involved professionals. WebBizBroker is not an investor, intermediary, Registered Investment Advisor or a Broker/Dealer. Please be sure to review our tips, included in this section, as well as others in our Frequently Asked Questions (FAQ) section.

You are probably already well versed in financing and if so you don't need to read the following few paragraphs. However, if you're less familiar with financing, let's just say that at one point or another you are likely to need it. Whether it's to execute your purchase of a business listed by WebBizBroker, or to extend financing to a buyer of your business listed by WebBizBroker. Or, if you're not currently buying or selling a business but need access to financial resources to market new products, pay vendors, meet payrolls, buy equipment, etc. No matter what you need financing for, it's helpful to be familiar with the various types and sources of capital. Then you'll know better where to find it and how to attract it.

Basically, it is usually less expensive to self-finance from your own internal operations or personal funds. If you can't satisfy your capital requirements with internal funds, consider offsetting a portion of your external requirements with internal funds. Doing so will show lenders and investors that you've got some "skin in the game", something they always find attractive.

At some point you'll likely need to consider traditional external sources, including banks, vendors, private equity firms or investment banks. Below you'll find brief descriptions of each along with a look at other sources of financing, events and some helpful books on financing:

Banks:
Banks offer numerous services and are most often associated with offering business loans or debt financing. This form of external funding is based on receiving a loan from an outside source (the bank) that is usually repayable over a specified and agreed-to period of time, at a pre-set interest rate. Loans may be either secured or unsecured. Secured means security, meaning the borrower agrees to some form of collateral as an assurance that the loan will be repaid. If the borrower, the "debtor", defaults on the loan, their collateral is forfeited to the lender as payment of the debt owed.

To see our listed bankers, click here.

For helpful books about banking, click here.

Private Equity Firms:
Private equity normally follows Venture Capital. Sometimes it is considered "Mezzanine" financing, implying somewhat after they earliest investors but before conventional later stage type investment or Lenders, e.g. Banks. Private Equity investments are typically still in the earlier therefore riskier stage of business financing, thus the investors command a premium return (although normally less than Angels and VCs).

To see our listed private equity firms click here.

For helpful books about private equity, click here.

Angel Groups:
Angel investors, or "Angels" as they're more commonly known tend to be high net worth individual investors who enjoy investing some of their personal capital in earlier stage businesses. Here we focus on groups of angels as many have formed or joined local angel organizations where they share investment opportunities and often times aggregate their capital to co-invest.

For helpful books about angel investing, click here.

Venture Capital:
Venture Capital is usually organized as a fund, meaning that a venture capital firm has attracted capital from other investors who pay the firm to invest their money and manage an investment portfolio. Venture Capitalists, or VCs as they're known, typically make investments in earlier stage businesses. VCs normally invest later than Angels. VCs usually have certain criteria established, their "deal screen", which might define the industries, geography and size of investment that they prefer.

To see our listed VC's, click here.

For helpful books about venture capital, click here.

Books, etc.:
To learn more about Financing, please review this select list from Amazon.com: Books & Software