Eco 372 Week 2 Assignment

For this week’s assignment, I am going to write about what sources of funding might be available for the start-up company called “Sun Dry Fruits”. The company will offer organic fruits, dried in the sun. The raw material will be acquired from the local farmers who are compromised on planting pesticide free fruits. The funding is for the equipment to dry the fruits, rent, promotion and utilities. From this week’s readings I have found several sources for small start-ups; however, the funding that will satisfy the needs of the company is the State and Federal loan.

The State and Federal governments provide loans to small start-up businesses. One of the prerequisites for considering a loan to a business is that the owner has to participate in a financial management and budgeting training program. A grant from a state and federal government offers tax benefits and low interests (www.go4funding.com/). The federal government only funds small amounts. The federal government loan is the right source to fund my business since the amount that I will need is for the purchase of equipment, promotion, delivery, rent, and utilities. By adding the fixed and variable costs, the amount required are $30,000. The raw materials for the first three months will be acquired on consignment as agreed with the farmers. Moreover, the first customers are arranged and the quantities are pre-ordered for the first three months. After three months the business will sustain itself with the revenues generated.
At the initial stage, the federal funding with low interest is sufficient. I do not believe in Angel investors or some rich guy pouring money into a startup business. However, I strongly believe that with an adequate compromise with small farmers I can run a thriving business that will profit everybody who is