Factor to consider when choosing a method of financing a business

      

Factors put in consideration when choosing methods of financing a business

  

Answers


Benjamin
a) Repayment terms-consider how long the financial arrangement is steuctured to last
b) Cost of finance/interest and fee structure-add up all the cost associated with the each financing method and its effect on income
c) Risk-consider what will happen if we are unable to meet the financial commitments ralating to that particular source of finance
d) Control-issuing additional shares(equity) will result in a dilution of control among existing shareholders
e) Additional requirement such as ownership-look into all the ramification of your decisions before moving ahead
f) Consider whether you should obtain long term or short borrowing/term funding
Kalis answered the question on March 21, 2018 at 06:05


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