Loans are one means of acquiring cash to enable you to start your business.

Almost every new business requires some cash to get started, for things like:

• Inventory. To purchase goods that you will be offering for sale to your customers (this is especially true for wholesale or retail businesses).
• Product development. To pay salaries to individuals who are designing or developing products that you will eventually be selling to your customers (this is true for engineered products such as software).
• Raw materials. To purchase materials that you will use to manufacture products that you will be selling (this is true for manufactured products).
• Marketing and sales. To pay salaries to individuals who will be selling your products prior to them actually making sales.
• Computers, machinery and other equipment. Necessary to run the business, manufacture the goods, support employees, and so on.
• Rent, utilities, telephones, office supplies, business cards, and other infrastructure.

Almost every ongoing business – even profitable ones – requires some cash – typically called a “line of credit” – while doing business, for things like:

• Inventory. To purchase goods that you will be offering for sale to your customers (this is especially true for wholesale or retail businesses).
• Payroll. To make payroll
• Raw materials. To purchase materials that you will use to manufacture products that you will be selling (this is true for manufactured products).
• Computers, machinery and other equipment. Necessary to run the business, manufacture the goods, support employees, and so on.
• Rent, utilities, and other infrastructure.

Related Questions:

How does a start up company get money?

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