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Business Start Ups

Financing a Business

There are different financing methods available to a business today. They are majorly divided into;

  1. Short-term financing-It is used to fund current assets with the aim of increasing stock or receivables, to ensure that the business remains liquid and enable it pay its liabilities.
  2. Long-term financing-It is a type of funding used to fund a business for a longer period of time and is used mainly to finance current assets.

Business finance is a vital decision to the business owner and it is therefore important that the business owner chooses the type of financing they wish to use wisely to avoid solvency problems. The owner should wisely match every asset with the appropriate type of financing.


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