Entrepreneurial finance is a process with which you can manage your working capital. It also helps in analysing the availability of funds, avail start up business loans and take financial decisions depending on reports and analysis. The factors to keep in mind while involving such a process are examining requirements, existing advances, managing working capital, and analysing the sources of finance.
The several sources of finance are debt funding with which you can avail collateral-free loans, equity funding, etc. You can also approach venture capitalists that provide financing against equity. For such investors, the tenor is usually short and ranges between 3 and 5 years within which you are required to provide returns on their investments. Besides, angel investors are also a type of investor that offer finance against a specific percentage of return on their investments.
Another type of funding option is peer-to-peer lending where you raise funds via online platform from lenders. Peer-to-peer financing is the least preferred option and should only be considered when you fail to qualify for advances or the mentioned sources of business finance.
Some of the lessons that we get from such a process are that equity funds may prove beneficial than debt funding. However, equity funds may involve certain risks for which the returns are higher compared to other funds. In addition, your existing advances also play an important role while you avail credits for your firm.