How to overcome debt - Part 2

In my last post, I made an introduction to the ways in which we can overcome debt and today we will be going further into it

If you are lost and trying to understand how we started, you can go back to my blog to check the previous part 1 to give you the first part

From family and friends:

this is also another means through which capital is generated to start or finance business. Some business man running small business acquire funds through their friends and relations who are financially boyant than them.

The capital to start or finance business may be borrowed through relatives but the payment under this is mostly on short term basis. This is done in attempt to promote good relationship of the family members. Although the capital borrowed may be expected to pay back but constitute ability to boost wealth of business as more capital is granted.

The capitals mostly observe through this is acquired on short term basis as the money borrowed may be expected to be payed back within little time. Although paying with interest is not common under this source but only that the capital acquired through this means may be agreed on when payment is expected to be made but there is no need for presenting collateral securities before capital is granted.

With promissory notes:

this is an unconditional promise in writing under which agreement is signed between the seller and the buyer that, when goods are sold on credit basis, the payment is to be made back at stipulated time.

Here the buyer who is regarded as borrower will indicate his acceptance to pay on the date appeared on the promissory notes. In this present day business, this has been attributed to law under which the payment is made unconditionally for the buyer I.e no condition is accepted for his or her in ability to pay at agreed time.

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Through commercial banks and other financial institutes:

sustenance of business is also made possible through borrowing from commercial banks and other financial institutions. Although, most commercial banks always feel reluctant to grant credit to small business because of the difficulties experienced in getting the money back.

But they are still granting credit to some based on how they perceived the standard of the business although, large and substantial amount of money is granted here as credit but interests is always high and presentation of collateral securities is made mandatory.

Not only banks are found here but other finance institutions such as co-operative, small business scale loans, micro-finance and others that are numerous to mention also involved. The case is always critical when the borrower refused to pay no agreed time as his properties presented as collateral securities may be disposed.

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