Raising Capital-Money : Major Block To Small Entrepreneurs
April 10th 2007 03:29
Survey finds that lack of financing is a common stumbling block for small business owners. This is a special problem that small entrepreneurs face mainly because they are, well, small. Most small entrepreneurs are relying on their own savings and family loans to finance their own firms. They are unable to hire skilled manpower and good line management and specialized staff. Given these, they are, more than bigger enterprises, in need of outside assistance. Competent, professional assistance.
Small entrepreneurs are now recognized as an important tool against poverty. Entrepreneurs are also thought to have the potential to bring the country out of the economic rut it is in. Governments who recognize this potential are granting them loans and helping them become good managers, thereby establishing a deep foundation.
Other sources of credit where small business owners could tap to raise the needed capital-money are :
* Credit cooperatives. These are a popular and easy source of credit especially in the rural areas. It may therefore be very useful for you, as entrepreneur, to join one. Usually a credit coop will lend an amount up to five times bigger than the money a member has deposited in it. Interest charges are often minimal.
* Lending investors. These are business enterprises engaged in money-lending operations. Considered a cross between money lenders and banks, lending investors extend short-term loans quickly to individuals and businesses with or without collateral.
* Formal sources of credit. These include banks, financial institutions and certain government development agencies and development-oriented non-government organizations.
There are also two microfinance institutions worth mentioning here whose focus is on lending to small entrepreneurs from poor countries :
www.kiva.org A web site that provides information about small entrepreneurs in poor countries- their photos, loan proposals and credit history. They connect the donor directly to the beneficiary or allow people to make direct loans to them.
www.Globalgiving.com is another terrific web site which connects donors to would be recipients. While Kiva is for loans, Globalgiving is for donations.
Small entrepreneurs are now recognized as an important tool against poverty. Entrepreneurs are also thought to have the potential to bring the country out of the economic rut it is in. Governments who recognize this potential are granting them loans and helping them become good managers, thereby establishing a deep foundation.
Other sources of credit where small business owners could tap to raise the needed capital-money are :
* Credit cooperatives. These are a popular and easy source of credit especially in the rural areas. It may therefore be very useful for you, as entrepreneur, to join one. Usually a credit coop will lend an amount up to five times bigger than the money a member has deposited in it. Interest charges are often minimal.
* Lending investors. These are business enterprises engaged in money-lending operations. Considered a cross between money lenders and banks, lending investors extend short-term loans quickly to individuals and businesses with or without collateral.
* Formal sources of credit. These include banks, financial institutions and certain government development agencies and development-oriented non-government organizations.
There are also two microfinance institutions worth mentioning here whose focus is on lending to small entrepreneurs from poor countries :
www.kiva.org A web site that provides information about small entrepreneurs in poor countries- their photos, loan proposals and credit history. They connect the donor directly to the beneficiary or allow people to make direct loans to them.
www.Globalgiving.com is another terrific web site which connects donors to would be recipients. While Kiva is for loans, Globalgiving is for donations.
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