Describe the various sources of capital funding available to new and small firms.

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Describe the various sources of capital funding available to new and small firms.

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Most new and small firms finance their business assets by borrowing funds from private or public sources. Private capital fund suppliers fall into two basic categories: suppliers of debt financing and suppliers of equity financing. Debt financing includes capital funds borrowed from personal savings, friends or relatives, financial institutions such as commercial bank loans, or venture capitalists. Equity financing includes capital funds invested by venture capitalists. Public sources of capital include debt and equity financing provided by government agencies such as the U.S. Small Business Administration (SBA).

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