Financial Resources Management Essay Example | Topics and Well Written Essays - 2000 words

Financial Resources Management - Essay ExampleIt is the relations between the Dollars or Euros that an entrepreneur has borrowed and Dollars or Euros invested in the business. The more the investment by the owners the more they attract the financial support.When the equity to debt ratio of the firm is high then debt financing should be taken. If the proportion of the debt to equity ratio of the firm is high then it is advised that the owners should increase their equity investment, that way they cannot jeopardize firms survival.Limited equity financing is used by most of the smaller or growth stage businesses. Whereas in debt financing, funds pour in from different quarters like from friends, relatives, etcetera Venture capitalists be the most vulgar source of equity funding. Venture capitalists may be institutional risk takers, financial institutions, wealthy persons, etc. and most of them specialize in industries.Venture capitalists are risk takers and show interest only in three to five year old companies that result in more than average profits. These venture capitalists are called as investment gurus whose interest lies in those companies that have major regional and national concerns.Commercial finance companies, financial institutions, banks, savings and bestows, Lloyds Bank small business, etc. are some of the sources for debt financing. Because of their positive impact on the whole economy local and state government encourage the growth of the small companies. In debt financing additional funds comes from friends, family, relatives, and industry colleagues, etc when capital investment is smaller.Generally banks formed as a major source for loans for the establishment of small businesses. Banks dont offer dogged term loans to small firms instead they grant short term loans for machinery and equipment, they also offer demand loans to small firms that reduces the risk of leveraging the funds available. Applying for a loanLoan application should b e well written, so that the reader could get a clear picture of what your plans are. The presentation should be of the best quality in the initial loan proposal and application. Only industry specific details should be included so that reader can easily understand.Business commentarya. Organization type.b. Information date.c. Location.d. Product or service.e. Firms previous commitments (if any).f. Future plans.g. Competition.h. Customers.i. Suppliers. Management experience Resume of the owner and important employees should be included.Personal Financial Statements rush should be taken that the financial statements are not older than 90 days and financial statements of all principal owners and guarantors should be included. A copy of put out years income tax return should also be included.Loan Repayment The method of repayment of loan should be included and supporting documents of cash flow schedules, budgets and