the answer is: banks and other financial institutions
banks and other financial institutions tend to like to put their investment on experienced entrepreneurs that manage business with large profits. young owners of a sole proprietorship would be seen as a risky investment with very little return.
the best shot that those young owners have to accumulate their capital would be from angel investors or from friends/family.
hilary buys a home for $100,000 and puts down 20 percent with a 5 percent mortgage. she sells it after 1 year when the house has declined in value by 4 percent. ignoring any real estate commissions or mortgage amortization, what has been the rate of return on her investment for the year?
-40 (if 4% mortgage, -36 percent)