Understanding Financing Sources

Daily tasks and long-term plans are integral to running a successful business. Perhaps you’re just starting out and need a boost, or maybe you think you’re ready to get to the next step and add to your repertoire. These activities, short-term or long-term, can benefit greatly from financing.

There are many ways MaxLend loans, credit funds, grants, and other financing tools can help you run your business. However, before you decide what you’re going to do, it’s important to consider the advantages and disadvantages of different funding sources so you pick the best one. Here are a few options:

Asset Sales

Putting your assets up for sale can help you earn more. This financing option is popular with business owners because if they have good capital, the process can be fast and easy. Let’s say you have equipment lying around that you barely use. Perhaps it would have better utility in someone else’s hands. Selling this equipment can help you raise funds for equipment, staffing, and expansions that could help your business.

However, it doesn’t benefit every business owner to immediately start selling his or her things. You should look ahead and carefully consider whether your assets will one day come in handy. Even if some of your tools aren’t helping you at the moment, you may take on new projects in the future that require it. There’s also the chance that you won’t be able to find anyone who’s interested in buying your assets for the market value you have in mind.


Running a business is unpredictable, and you may run into emergency situations that require immediate purchases. This is especially the case if your account reaches zero. If this ever happens to you, a bank might provide you with an emergency loan, or overdraft, to pick up the pieces.

While overdrafts provide a nice safety net for many business owners, this funding usually shouldn’t be used unless it’s needed. The aid overdrafts give is only short-term, and the interest rates can be relatively high. However, there are lenders that might grant you some flexibility and competitive rates, and it’s comforting to know that something might be available to help you when you need it.

Owners Capital

If you don’t want to borrow money, fill out loads of paperwork, or pay interest, owners capital can be your saving grace. Your company’s net assets would constitute your owners capital account. Funds from you and your shareholders can help drive new operations and earn you more money.

The problem with this financing method is that if you don’t have sufficient capital, there isn’t much you can do. If you do think you have the savings that are required, it’s important to consider if you might need those savings for other means, such as personal use, down the line. It’s also important to understand that once the capital is spent, you won’t see it again.


Financing helps business owners in many different ways, under many different circumstances. Because of the high volume of options, it’s important to carefully assess your situation to determine what financing tool can help you the most.