Funding Option
The Bank loan is the best funding option as it directly or indirectly indicates the status of the capital market, which in turn gives values the business based on the current and global values, placing the firm in a better position to reevaluation its niche and future growth process (DeYoung, Gron, Torna, & Winton, 2015).
Debt loan
More so, the loan will be under a debt and not equity (DeYoung, Gron, Torna, & Winton, 2015).. A debt is more favorable for a startup enterprise. In addition, the lender does not get a share of the business profit. Simply put the debtor does not dilute the value of the business.
Tire shop Business plan
Yes, a complete business plan is essential in measuring the amount borrowed against the financial needs required to jump-start the business and make it operational (DeYoung, Gron, Torna, & Winton, 2015).. Thus, a business plan materializes the plan into reality and exposes any finances loopholes that can leak money and waste time. Therefore, a business plan gives a glimpse into the future of the business at an early stage and can prevent early collapse of the business. In other words, it should be airtight and reliable enough.
Sustainable financing of the business
After identifying a source of capital and business plan the Tire shop will use data generated on daily business days to dictate the utilization of its resources. Generally, a small business financials statement is private as it is not public traded (DeYoung, Gron, Torna, & Winton, 2015).. Therefore breaking daily expenditure into tiny bits can help in the financing process. In summary, cutting on recurrent expenditure based on daily data will help save the business from unnecessary expenditure and direct the money to other sections of the business. Secondly pumping most of the profits back into the business would allow for more growth.
References
DeYoung, R., Gron, A., Torna, G., & Winton, A. (2015). Risk overhang and loan portfolio decisions: small business loan supply before and during the financial crisis. The Journal of Finance, 70(6), 2451-2488.
