Question

Sources of Debt Financing
Please respond to the following:

Briefly describe a small business you could envision yourself owning and discuss the most appropriate source of debt capital for that business. Explain your rationale.

From the e-Activity, discuss how you could best use an SBA loan to get your business running or expanding. Provide specific examples to support your response.

Answer 1

The business I could see myself running is a comic book store and gaming place, such as Magic or other, similar games. Given my financial status and that of my friends and family, I would have no choice but to seek outside sources of debt capital. Investors (or Angels), Venture Capitalists, or more likely a Small Business Loan would get me the funding to get the business off the ground. Getting the SBL would be the most obvious way for me to obtain the funds, as it would cover most of my start-up costs and make me beholden to only one bank to pay off. Venture capitalists and Angels would be a great if you can get them, but for a small operation they may be more problematic to obtain.