Using Borrowings to Raise Capital for Your Business

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Borrowings are loan proceeds. When you take out a loan(s) to fund your business's start-up costs or operating expenses, you are using debt (rather than equity) to finance your business. There are many forms and sources of borrowings. These include loans against the stock, equity, or assets of your business; loans from banks and private sources; credit card, home equity, and other consumer borrowing; and loans from you to your business. You may even be able to get a guaranteed loan through the Small Business Administration.

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