What are the Benefits and risk of a new business using multiple sources of funding?

Question

What are the Benefits and risk of a new business using multiple sources of funding?

Answer 1

You can earn money. And the risk are you will have to pay a lot of scam.

Answer 2

As I see it, having multiple sources for working capital can be very beneficial. For example;

1. Your own savings (not borrowing)

2. Bank "Line of Credit" (with limits)

3. Family and friends provide loans

4. Investors (but they usually want an ownership interest)

5. Equipment leasing

6. Factoring (using invoices to accelerate cash flow)

7. Purchase Order funding (usually coordinated with factoring of A/R)

8. Commercial loans (liens of real property)

9. Advances against future sales

10 There may be others unique to specific businesses

Combining any of these can be useful but if abused (over extending what the revenue of the business can safely support in payments) could be a financial disaster and make recovery and or growth difficult and sometimes impossible. Be cautious and seek the help of your accountant or other professional advisers.