Filippa needs some money to buy equipment for her new sole proprietorship. How could she obtain the money?
A. She could get a loan from a bank that was personally guaranteed
B. She could issue and sell stock in the business
C. She could borrow money from another owner of the business
D. She could get a loan that is guaranteed by the business
All of the options mentioned could be potential ways for Filippa to obtain money for her new sole proprietorship. However, the best choice would depend on Filippa's specific situation and preferences.
A. She could get a loan from a bank that was personally guaranteed: If Filippa has a good credit history and is willing to take on personal liability for the loan, this could be a viable option. However, it could put her personal assets at risk if the business fails to repay the loan.
B. She could issue and sell stock in the business: This option is more suitable for companies with multiple owners or those looking to raise significant capital by selling shares of ownership. It may not be the most practical choice for a sole proprietorship unless Filippa plans to convert it into a different business structure in the future.
C. She could borrow money from another owner of the business: If Filippa has a partner or co-owner in the sole proprietorship, borrowing money from them could be an option. However, it would depend on whether the other owner is willing and able to lend the money.
D. She could get a loan that is guaranteed by the business: This option involves borrowing money specifically for the business, with the business assets serving as collateral. It could be a good choice if Filippa wants to separate personal liability from the business and ensure that only business assets are at risk.
Ultimately, Filippa should carefully consider her financial situation, risk tolerance, and long-term business goals in order to determine the most appropriate method for obtaining the money for her sole proprietorship.