INDIVIDUAL PROJECT 1

The introduction of the new product and the development of a new technology raise the problem of funding of the project. In this regard, borrowing money is the best option because it provides a company with an opportunity to get money fast, to develop and introduce a new technology, to start earning money and to pay off the debt to the bank. After that the company will be absolutely independent and free to develop its technology and to use its financial resources independently of other stakeholders which may be involved if other sources of funding but borrowed money are used.

 
Introduction
The development of the new technology raises inevitably the problem of finding sources of funding of its development and introduction. Without the proper source of funding even the most prospective technology is doomed to failure. In such a context, a company developing a new technology should choose the source of funding which is the most appropriate in the current business environment, taking into consideration the potential of the new technology, risks and expected returns on investments. In this respect, borrowing money from a bank seems to be the best solution on the condition of relatively high return on investments, good prospects of the new technology and relatively low or medium risks.
Advantages of borrowing money
Borrowing money provides a company developing a new technology with ample opportunities to accomplish the project successfully and return money back to the bank. First of all, borrowing money provides the company with money fast and the company can use the money to develop the new technology respectively to its needs without any limitations concerning the further use of the new technology (Boyle & William, 1999). In other words, the company will possess the intellectual property rights and will be the only owner of the new technology. Secondly, the company will be able to use the financial resources for a considerable period of time before it will pay off the debt (Coyle, 1999). In such a way, the company will have time for the development of its business. In addition, the company may provide other companies with the license to use the new technology and, thus, benefit from the new technology to pay off the debt.
Potential drawbacks of borrowing money
On the other hand, borrowing money has a number of drawbacks. First, taking into consideration existing risks, the interest rate may be high and, therefore, the company will need to pay off interests along with the money it has originally borrowed in the bank (Anderson, 2008). In such a way, the company will lose a part of its profits to pay off interests. In addition, in case of failure of the project, the company is likely to lose its property and, thus, the company will be ruined. Moreover, the current financial situation is unstable that raises risks concerning bank’s policies of lending money. This means that borrowing money may be too expensive in time of the financial crisis.
Conclusion
Thus, taking into account all above mentioned, it is important to lay emphasis on the fact that borrowing money is the best solution for the development of the new business and new technology. Obviously existing drawbacks make borrowing money expensive but the company can use full benefits of using the new technology that outweighs all the drawbacks of borrowing money.

References:
Anderson, C. (2008). “In Search of Perfect Market.” The Economist, 343(12), p.199-207.
Boyle, M. & William, J. (1999). “The Emerging International Tax Environment For Electronic Commerce.” Tax Management International Journal, 28(6), p.104-116.
Coyle, T. (1999). “Surveys and Trends.” America’s Community Banker, 8(9), p.93-108.