Business Financing Terms

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Angel Investor

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An investor interested in financing startup ventures (companies)

. They are like an angel in disguise.

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Barter Financing

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The trading of items or services between businesses.

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Bootstrapping

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Starting a business by yourself, without any outside investment. Using your own bank account.

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Credit Union

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A nonprofit cooperative organization that offers low interest loans to members.

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Crowdfunding

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Financing a business by raising money from a large number of people online.

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Customer Financing

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Capital provided by customers to help finance a business that can be considered either debt or equity financing depending on the terms.

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Debt Financing

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Obtaining money by borrowing it, thereby increasing your company’s debt.

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Equity Financing

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Method of financing a startup business by selling shares of ownership in the business.

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Payback

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The amount of time, measured in months, that it takes a business to earn enough profit to cover the startup investment.

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Venture Capital

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Money that is invested in a potentially profitable business by a specialized company whose purpose is to invest in startups.