Startups require a thorough understanding of the fundamentals of finance. If you want to convince investors or banks that your business idea deserves investment, key financial records of a startup such as income statements (incomes and expenses) and financial forecasts will help.

Startup finances often boil down to a simple equation. You have cash in your bank or you’re in debt. Cash flow can be challenging for small businesses. It’s crucial to monitor your balance sheet and not overextend yourself.

As a start-up you’ll probably need to seek out equity or debt financing to expand your business and become profitable. Investors will typically look at your business’s plan of operation along with projected revenue and costs, and the likelihood of a return on their investment.

There are numerous ways to bootstrap a startup, from getting a business credit card with the introductory rate of 0% to crowdfunding platforms for a brand new business. But, it’s important to take note that the use of credit cards or debt may hurt your personal and business credit score, and you should always pay off your debts promptly.

Another option is to get money from friends see here and family who are willing to invest in your business. While this may be an ideal option for your startup but you should make sure to set the terms of any loan in writing to avoid conflicts and ensure that everyone is aware of what their contribution will mean for your bottom line. In addition, if you give an individual shares of your company, they’re considered to be an investor and has to be governed by the law of securities.