"Financing, Valuation, and Rating Agencies" - Coursework Example

Sources of Finance for a Convenience Store al Affiliation Sources of Finance for a Convenience Store. A convenience store is a shop located at strategic locations selling fast moving products such as tobacco, snacks, and magazines. The stores are usually run by an attendant and are at the epicenter of an extremely active society. The most preferred site is at a junction of busy commercial streets or industrial packs to serve workers. Other utilities may include a coffee shop and a gas station that are among the top priorities of a working people.

Fast moving products translate to mobile cash and, therefore, a good profit making business.Equity Financing is one way to get capital to start up a convenience store. Equity financing involves the sale of ownership right to interested partners. The money raised through equity financing is much higher than any other form of funding and is not limited or regulated (Williams, 2012). Investors can pump in money that the convenience store can overcome startup hurdles and grow in a very short period.

The money contributed by investors is not returnable; thus the store will run till it breaks even so as to start the cash recovery.Shareholders bring along valuable skills and information to the convenience store. It is easier to achieve a target when different people are working towards the goal than when alone (Chandra, 2010). There are high expectations of success and responsibility as compared to debt financing. Capital raised from debt financing is limited and returnable. Expectations are low for debt financing as compared to equity funding, and collateral may limit finance required.

Convenience stores are excellent avenues for revenue generation. Capital required is high as the risk of running it also stands high. With equity financing, enough money can be raised to steer off high growth and develop a consumer-oriented market.ReferencesChandra, P. (2010). Fundamentals of financial management. New Deli: Tata McGraw-hill Education.Williams, J. R. (2012). Financial and managerial accounting: the basis for business decisions. New York: McGraw-Hill Irwin.