Description

Businesses need resources to grow and entrepreneurs are typically constrained by the lack of resources at both the start-up and growth stages of a company's life cycle. Due to this deficiency, entrepreneurs look for funding from banks, potential investors, or even acquirers to allow for the next stage of growth. On average, firms with greater resources increase their odds of growth and survival and insufficient funding leads to lower performance levels. Debt financing from banks provides an avenue for business owners to repay loans with interest without having to give up equity or ownership control. However, new firms face challenging financing markets due to their lack of company financial history.