Businesses rely on financing activities to fund their operating and investments. Explain the difference between owner and nonowner financing, and explain the benefits and risks involved in relying more heavily on each type of financing.

As you can se there are two types of financing a business or any type of project that you want to start. when you relying more in the owner financing you have to assume the responsibility and be aware that you could pay the credit in the future, when you put more your own money you could lose it but you assume the total risk.

Explanation

1. Owner financing = Many people have savings of extra money that they want to use to invest in some economic activity in this case are money from your own resources that you punt into any activity o investment. In this case you don't acquire any responsibility because is your money, but you assume the risk of could lose a part or the total amount of money that you invested.

2. Non other financing: This case is when you ask to someone that borrow money could be people, business, financial institutions like banks. another type of financing through others is when you ask to your suppliers that give you credit of 30 o 60 days to pay the merchandise. In this case usually is accounting is called liabilities, and this risk is you are compromised with other people to return the money and in some cases with an interest, in the scenario that you can't pay you must pay with your assists or make an agreement to return this money.