CHAPTER 3•FUNDING SOURCES FOR BUSINESSES ON THE “GROW” 51
Institutional Debt
Debt financing is available from many sources, including banks, other
commercial lending institutions, leasing companies, and suppliers.
Most loan agreements call for regular repayments of the principal plus
interest, whether set at a specified rate or adjusted according to a for-
mula. Credit cards are often an entrepreneur’s easiest source of credit
for the business. Although convenient for meeting short-term financial
needs, credit card debt is an expensive form of financing, usually bear-
ing higher rates of interest and shorter repayment cycles than commer-
cial credit. Many entrepreneurs raise funds for the business by taking
out personal bank loans and pledging assets such ...