chevron-down Created with Sketch Beta.
March 18, 2013

The Law and Your Business

Securing Capital

What are some ways of securing capital?

“Capital” is another word for "money." By any name, it's the lifeblood of any new business. There are usually several potential sources of capital for a new business:

  • contributions made by you;
  • loans from family and friends;
  • loans from banks and other financial institutions;
  • loans underwritten by a government agency;
  • investments made by others who will be actively involved in the management of the business; and
  • investments from other individuals and institutions who won't be actively involved in the business and are just looking at the profit potential.

How and where the funds come from have many significant legal considerations.

>>What are some ways of securing capital?
>>How about using my home equity to get funds?
>>What are the legal considerations in getting loans from family and friends?
>>What is a promissory note?
>>What are some legal considerations in loans from financial institutions?
>>What about my spouse’s assets?
>>Are government loans available?
>>What about help for women and minorities?
>>What are the legal considerations in getting contributions from others?
>>Legally, what’s the difference between active investors and passive investors?
>>What if I want to have “passive" co-owners?

Practical Law Home | The Law & Your Business Home | *Securing Capital*
State/Local Laws That Affect New Businesses | Home-based Businesses