Money
The partners of the Used Book store are looking into other logical sources of funding for their business. Currently they are receiving funding from a rich relative. For independence, longevity, and success, they feel they need to research other avenues of funding. There are several different types of funding available to them, but they must decide which source would best suit their needs, whether it is remaining with the rich relative or some other source.
Trade credit (open-book credit), credit cards, and SBA guaranteed loans are all types of funding available for small businesses (Ebert & Griffin, 2005). They will need to compare other sources of funding with the benefits and risks involved with remaining with the rich relative.
Trade Credit
Trade credit is the credit extended to businesses by suppliers who let them buy now and pay later. The advantage of trade credit is the ability to take delivery of materials, equipment or other valuables without paying cash on the spot. The practice of trade credit can also help to establish a good working environment between suppliers and the business.
Most suppliers unfortunately will not offer trade credit to a new business that they have not established a working relationship. They will demand payment by cash or check on delivery, or payment by credit card in advance until the business has established that they can pay their bills on time (Entrepreneur, 2008, ¶ 2).
Credit Cards
Credit cards are a convenient and easy way to pay for supplies, material and equipment necessary to start a business. There are several banks that offer business credit cards with different benefits such as reward points, no annual fee, low introdu ...