This is a straightforward form of financing where a company borrows funds from a lender and repays it with interest over a fixed term.
Besides these, some other types of business finance based on the source are:
Angel investors: These are investors, individuals or companies who can provide business financing. Businesses can reach out to them through financial consultants, lawyers or other business advisors.
Personal equity placements: This is a regulated form of financing that requires the support of a professional team of legal, financial, and accounting advisors.
Asset-based lending: Companies can secure loans using their assets or acquisitions with this type of financing. It can be used to purchase machinery, gear, lease, or buy properties for the business.
Friends and relatives: This is a popular form of financing, especially for start-ups and new businesses. Since funding comes from personal relationships, it doesn’t need due diligence and relies heavily on trust.