Imagine you own a small business which is in need of finance. What are the advantages and...

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Imagine you own a small business which is in need of finance. What are the advantages and disadvantages of a) raising money from banks, b) asking family members to contribute, and c) tightening your belt for a while to save some money? Compare and contrast the three approaches (at least 150 words each)


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A)When you take out a bank loan, you have complete control over what you do with the money. Unlike other forms of loans and financing, the bank does not assume any sort of ownership or influence in the way you run your business. Nevertheless, paying back the loan also is your responsibility, and failure to do so can result in the bank foreclosing on your business. This is different from equity financing, for example, through which investors take part ownership of your business. In that situation, you are not personally liable if they want to cash out, and it's up to them to find a buyer.


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