4PAYING THE FREIGHT—UNDERSTANDING FINANCING COSTS

Businesses seeking to acquire funding from third parties need to be cognizant of the cost of those funds. Understanding how funders determine and assess their costs—whether by charging interest or acquiring equity (an ownership in a business)—equips owners to better evaluate the desirability and feasibility of getting this kind of money.

Business owners should learn how interest rates and equity terms are determined in order to develop better negotiating strategies that might lower final costs. It also helps them to know when they’ve negotiated the best deal for themselves.

Borrowing Costs

From home mortgages to student loans to credit cards, consumers and business owners who borrow money from ...

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