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Guest author Matt Bacak:

FINANCING BASICS

In this delivery, Matt Bacak help us discover basic elements on obtaining financing, and learn about the differences between equity financing and debt financing.

The term financing is commonly used to explain the acquisition of loans from banks or other financial institutions. Financing is usually provided to business owners, either to be utilized as start-up capital or to support an on-going business. Some businesses may require financing to help them through a rough patch, or simply to provide some liquidity until more current assets are turned into cash. Additionally, financing is also given to companies who are expanding their businesses rapidly and require the money to support their new operations and facilities.

Due the high interests and high risks that come with financing, small business owners are often compelled to evaluate their situation from all angles before making a financing decision. This is because there is a full range of loan types available in the market, each of them for different purposes and with different interest rates, repayment terms and loan terms. Apart from that, business owners do not want to miscalculate their loan amounts, as obtaining a greater loan value will mean a higher liability to the company, while getting a smaller loan will produce a situation of inadequate financing.

Inversely, banks or financing institutions function to provide financing facilities in order to make profits from the interest payable by the borrowers. In return, they obtain a monthly repayment amount from the company, including interests. Banks usually provide loans through the pledge of fixed assets to the banks as collateral. In the event of payment default, the lender will sell the assets to recover your debt to them. However, there may be cases that lenders provide loans without the need for collateral, but with a higher interest and more stringent qualifying procedures.

Apart from obtaining financing from lenders, small business owners are also eligible for loans from government fund agencies such as the U. S. Small Business Administration (SBA) or the local state governments. These agencies provide financing to help spur the growth of small businesses in the country, and usually impose criteria that are more flexible as compared to banks. In the Small Business Loan program run by the SBA, they act as a guarantor for the borrower in order for them to obtain loans of a longer term from SBA’s lending partners.

All the financing sources mentioned thus far are generally known as debt financing. This type of financing would be ideal for companies that have a high equity to debt ratio, which means that the owners of the company has invested more capital as compared to the amount of debt obtained. However, in cases where the equity to debt ratio is low, it may be difficult for a company to obtain debt financing. Therefore, the alterative to this would be to work with equity financing instead.

Equity financing would be funding obtained from friends, family or employees in exchange for shares in the company. Additionally, venture capitalists are also another source of equity financing, which has become a common source of income especially since the dot com boom.

Venture capitalists are professional investors and are prepared to take a very high risk in exchange for their investment. However, with the involvement of a venture capitalist, more stringent management and accounting procedures may need to be adopted, in addition to the inclusion of the venture capitalist in making major decisions.

It is not easy obtaining financing from venture capitalists as they expect high rates of returns for their investment in return for the high risks incurred. Many applicants are screened through yearly, with only a handful that will actually be funded. In addition to that, venture capitalists expect to grow their companies into regional brand names within a short period of time. Getting the company publicly listed is also one of the main objectives of venture capitalists.

In short, there are many avenues in which financing can be obtained. Ultimately, it is up to the business owner to decide on the financing source that would be most suitable for the company. As there are pros and cons to each, a financial and situational evaluation on the company would be most helpful for making the right decision.

ABOUT THE AUTHOR

Matt Bacak, is the owner of The Powerful Promoter and Entrepreneur Magazine e-Biz radio show host. For more visit Bacak's site at http://www.powerfulpromoter.com
------------------------------------------------------------------------------------ HAPPY AND SUCCESSFUL BUSINESS YEAR 2005

Africabiz Online and Email editions' team wishes you all and your loved ones a successful business year for 2006.

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Business Opportunities

PART IV: - TILAPIA: A PERFECT FISH SPECIE TO SETUP INCOME BUILDING OPERATIONS FOR AFRICAN RURAL COMMUNITIES

In most African countries, there are, here and there, research stations on fish-farming development. But sadly enough, such researches had not resulted into full promotional activities to establish Tilapia as protein provider for the populations.

Indeed, currently (end of 2005) not a single sub-Saharan African country had a promotion plan for the extensive culture of Tilapia. One could therefore consider the African market for Tilapia to be potentially a huge one for whole fresh product and transformed products such as smoked and sun-dried tilapia.

Considering an intake of one (the strict minimum) whole tilapia per African, per month, one could estimate the market size to be in the range of minimum 3,264,000 metric ton a year. [400g x 680,000,000 (Africans) x 12 (months)]. Imagine what the potential would be if one consider a daily intake of one whole tilapia fish per inhabitant!

There is also an ever growing international market as shown by the import trend for the United States of America (see graphic on the right).

Due to the "extraordinary" prolificness of Tilapia, it could be considered as a perfect Income Building Power for rural communities in African countries. That is It could provide cash on a sustainable basis to rural folks throughout Africa.

Based on previous deliveries' contents, the next issue (February 15, 2006) will further consider Catfish's breeding characteristics - in anticipation to the exposure of the investments about a small-scale polyculture operation based on Tilapia and Catfish in African countries.

For more on Tilapia's Breeding As Income Building Operations In Rural Communities in African Countries Click here

MORE ON FISH FARMING

1- How to Start and Manage a Fish Farming Business by Jerre G. Lewis 2- Integrated Fish Farming by Workshop on Integrated Fish Farming 3- Catfish farming handbook by Jerry Mack Johnson 4- Commercial Catfish Farming by Jasper S. Lee 5- Cage Culture Of Tilapia In Rural Farm Ponds An article from: Journal of the Alabama Academy of Science [HTML] (Digital - January 1, 2000) 6- Backyard Fish Farming by Paul Bryant

7- Intensive Fish Farming by Jonathan Shepherd, Niall Bromage 8- Second International Symposium on Tilapia in Aquaculture: by Thai International Symposium on Tilapia in Aquaculture 1987 Bangkok, et al (Hardcover - January 1990) 9- Tilapia Culture by Abdel-fattah M. El-sayed, A. F. M. Sayed (Hardcover - February 2006) 10- Tilapias: Biology and Exploitation by M.C.M Beveridge (Editor), B. McAndrew (Editor)

Control Your Desktop

FILE SHARING MADE EASY, SECURE AND SPEEDY

There are millions of Videos, Music, Software and Games data and files floating around in the cyberspace. You name it, you have it. The most ancient and the most recent ones. Versions that had disappeared from the marketplace are aplenty. You just need to download almost for free.

There is an ever swelling surfers' communities, which recourse to usenet network to download whatever they are searching for, sharing files between members through p2p (point-to-point) files sharing system.

Usenet was created before the Internet (and is still independent from the Internet.) It consists of more than 60,000 boards for discussions (newsgroups) about every topic under the sun. Opinions and data (e.g. Videos, MP3s, Software, Games, Erotica) are exchanged in these boards.

There are score of software available to assist downloading these files: eDonkey, eMule, Ares, Torrent family and so on - (make research in your favorite search engine for links to said software.)

The problem is - as an Usenet community member - you have to give access to your system for other members to download from your hard disk. Therefore, there is a limitation to download speed that is connected to the uploading speed. The more leeching (uploading) members, the slower the downloading process. Further, there is a security risk as you do not know who is accessing your hard disk.

Bittorrent is one of the most popular p2p protocol designed for high-speed distribution of 100MB or GB sized files. For more about the subject click here

Freebie Of The Month

WINDOWS WON'T SHUT DOWN?

After a heavy-load working day you click Start and Turn Off Computer and wait for Windows to shut down. And you wait and wait and nothing happen.

You certainly experienced what had been described in last sentence. This was a common occurrence with Windows 98 brand that now also happens with Windows XP when some utilities are installed on your computer. You may try the Exit option - right clicking on each program' system tray icons - to detect which utilities are responsible for Turn Off Commputer's lock down .

However, sometimes even that trick won't do. This is more probable as some applications just don't go well with Window's Hibernate or Suspend features.

You do not need to worry anymore. Here is ShutDown Lock a program that assist fixing the problem.

The program loads upon startup and sits quietly in the system tray. You can enable or disable it with one mouse click. If enabled, the program will either hibernate or suspend PC when a program prompts system shut down. This is a very valuable feature, because it prevents accidental data loss.

There are also (1) Turn Off Now, (2) Log Off Now and (3) Restart Now options that performed well. However, we have noticed that sometimes an utility may resist the "injunction" - such as Ad-Watch Plus from lavasoft.com's AdAware Plus or AdAware SE. In that case it is preferable to use Ctrl + ALt + Del to summonWindows Task Manager to End Process of Ad-Watch.exe before selecting Shutdown Lock's Turn Off Now.

Click here to get Shutdown Lock. 100% FREE.