When a person is looking to open a small business they are going to need money to start it up. There are several different types of financing that can be used to start a small business.

Debt Financing
This is a popular type of business loan. They business will borrow money and pay it back on a monthly basis with interest. The business will have to have some type of collateral before being approved for the loan. This loan will help with start up costs and will help get the business running.


Equity Financing
This loan allows private investors to invest in the business for a share of equity. This type of loan may be easier for a business to get. Friends, family ,and other investors can choose to lend the business money and get a share in the profits. There is a lot of legal paperwork to fill out and investors are risking a lot. If the business does not take off they can lose money.
These are common ways that small businesses get start up funds. They may be risky but if the business takes off they can have the lenders paid back in no time.