Scott Herckis has over 25 years of business experience, including managing accounting and finance for fashion companies like Tory Burch and London Fog. Through his Stamford, Connecticut, company, SJH Financial, Scott Herckis helps SME businesses manage their financial records and obtain necessary capital as an outsourced CFO.
Small businesses need some capital to get off the ground and become profitable ventures. Typically, an owner first looks into self-funding a business up to a point. Taking money from savings accounts, friends, family, and even a 401k account, can be a good solution when owners need total control. However, self-funding also puts all the risk on the owner, and some methods like taking funds from 401k accounts come with additional fees.
Venture capitalists, using equity financing, have become popular, primarily due to TV shows like “Shark Tank.” A venture capitalist is a company that deals with much larger investments over several years. On the other hand, an angel investor is usually a single wealthy individual who invests in a single product and wants to move fast on precise terms. Both types typically demand a company share but provide a direct infusion of capital rather than a loan.
Small businesses can also turn to banks or another lending institution for loans. When using debt financing, small business owners retain control of their company, but their financials can suffer. Loans incur interest rates fees and large repayments.
Mezzanine financing is a combination of debt and equity financing where banks give a loan in exchange for a company share. This method can ease some banks into providing loans to small businesses that need them.
Small businesses need some capital to get off the ground and become profitable ventures. Typically, an owner first looks into self-funding a business up to a point. Taking money from savings accounts, friends, family, and even a 401k account, can be a good solution when owners need total control. However, self-funding also puts all the risk on the owner, and some methods like taking funds from 401k accounts come with additional fees.
Venture capitalists, using equity financing, have become popular, primarily due to TV shows like “Shark Tank.” A venture capitalist is a company that deals with much larger investments over several years. On the other hand, an angel investor is usually a single wealthy individual who invests in a single product and wants to move fast on precise terms. Both types typically demand a company share but provide a direct infusion of capital rather than a loan.
Small businesses can also turn to banks or another lending institution for loans. When using debt financing, small business owners retain control of their company, but their financials can suffer. Loans incur interest rates fees and large repayments.
Mezzanine financing is a combination of debt and equity financing where banks give a loan in exchange for a company share. This method can ease some banks into providing loans to small businesses that need them.
