My business being a limited liability company, the kind of ownership found in my business is that which combines several features found within a corporation and partnership structures. Owners within my company are not referred to as partners or shareholders but as members. The members in my company are not limited since they consist of corporations, various individuals and other limited liability companies.
What is the amount needed?
The total amount of dollar that is needed in this kind of business is about forty thousand dollars. These amounts have been generated from direct investments. According to Thomas (p17) in compiling the amount of dollar I need I ensured that I did not quote a higher amount that will be difficult to rise rather I have ensured that I state the exact amount (Thomas, p19).
The amount needed for the business is divided into the following manner.
It is important that new computers to be purchased at a cost of $1000.
To pay down the credit card an amount of $3000 is required.
$ 15,000 will assist in the flow of cash in cases of slow times.
The above entire amount total up to $20,000 leaving the business with $ 20,000 more.
According to Mckeever (p40), in the inventory segment I have ensured that it is very low so as to ensure that it is sufficient. The inventory is of about $900 where most part of it consists of excess resources of recycled glass, earrings, greeting cards, books, lotions and jobs. Other than the above described inventory I have a credit balance of about $7,200. This credit balance is effective since it will assist me in case I run out of cash. It is very important that business have other sources so that they are in a position that it will be able to support its seasonal upswings during its normal operations. Other sources also assist business people in identifying the working capital required for the business to operate effectively.
Like any kind of business, my limited liability company is expected to be faced with a number of expenditures. Here are some of the expenditures;
Purchase of property- none at the moment
Lease; it will comprise of $740 which is rent per month and from tripled net fees.
Furniture; this will comprise of furniture flooring, display and several office gears that will result to an amount of $4000.
Other expenditures are; a software at a price of $500.
The expenditure described above will be attained through the resale of o various items in the shop. This includes the resale of furnishers and equipment which will give rise to $1500 and also from the sale of computers and computer software amounting to $1000.
Loans and Lines of Credit
In order to facilitate the above described expenses there is a need to describe the lines of credit and loans. A mortgage loan will be efficient in the provision of the furniture and office flooring within the company.
The line of credit will finance an amount of $20,000; $8,000 will be able in the facilitation of inventories. The equipments purchased will improve good customer relations therefore an increment of 10% in the growth of sales within the business (Mckeever, p37).
The cash flow operation within the business will be sufficient in ensuring that $15,000 in the line of credit is repaid. There will be 250.00 per month after grace period of a year to facilitate the repayment process (Mckeever, p40). The cash budget of the business will cater for all the seasonal natures of the business cash flows.
The following assets are accessible to facilitate collateralize $40,000 of the proposed debt financing;
Respective accounts are available for collateral on the $20,000 line of credit.
The new computers that are intended to be purchased are available for collateral.