Another way to obtain capital is through private equity. These are typically investors or groups of investors that will provide money for your company. The caveat is the venture capitalist now owns part of the business. For a small business owner, having a partner may be something very new to them and difficult to become accustom to, particularly if it is a non-working partner. Also, venture capitalists are looking for large returns on their capital; many times they are looking for returns well in excess of 1000%. This form of financing may work well for companies anticipating large exponential growth and an exit strategy in which all of the owner's will be cashing out in a 3-5 year time frame with a large sum of money.
This funding channel is most often used to fund highly speculative ventures but in an environment where capital is not flowing freely, this may be the only option for some businesses.
Royce Joseph Capital has a better solution, a more intelligent solution to business funding. See why Royce Joseph Capital has a more intelligent solution to funding small business growth and expansion. (read more)