Starting Your Business -
Financing
Articles:
SBA Business Loans
The U.S. Small Business
Administration (SBA) was originally founded in 1953 as an independent agency of
the federal government to Aid, counsel, assist and protect the interests of
small business concerns, to preserve
free competitive enterprise
and to maintain and strengthen the overall economy of the United States.
Short and Long Term Loans for
Small Business
If you are a entrepreneur
and planning to get a fund for your business, here is another option to
consider, the term loans. In this article, learn about term loans as we discuss
to you the basic points about term loans for small businesses.
Starting a Business with No Capital--Do You Have
What It Takes?
Do you want to start a
business, but you have absolutely no money to invest in it up front? Don't
despair! You're certainly not alone and you may find that your business will
actually turn out better.
What Kind of Capital Do I Need for My Business?
The title of this article
best describes the question that most entrepreneurs ask themselves when they
want to raise capital for their businesses. The question about
raising capital should not only be about how much capital you need, but what
kind of capital you need.
Business Start Up Funding
Silver Bullet
Startup companies often get
frustrated when they can’t find investors willing to fund their new idea.
What they don’t realize is that in order to get an investment, they need more
than just a good idea and the promise of future profits.
5 Great Tools From The Small Business
Administration
f you're a small business owner, you need to check out the Small
Business Administration website. You may have been
reticent to visit as the SBA has not always been
perceived as the most helpful or efficient agency
out there. But they do, in fact, have some really
helpful tools for small business owners that you
should see.
Startup Your Business
With A Business Loan
t is not necessary to wait until you have a lot of
money to start up your business. The time is now.
How Do You Obtain
Grant Money?
We all have dreams of making and marketing some
ingenious invention, starting our own small
business, or enhancing our education. Actually every
invention, business and college graduate got there
because of a dream.
The Evolution of Financing a Small Business
For years I have
read the popular business magazines, all having so
called experts write articles for entrepreneurs on
how to finance their business. "The top 10
strategies for financing your start-up", "How the
SBA can help your small business", "Personal credit
is the key for entrepreneurs" and so on. In most
cases I'm willing to bet those writing these
articles are journalists that have never had a
successful start-up. How can I come to that
conclusion you may ask? Because of the bad advice
they give.
Great Ways to Cut the Cost of Starting Your
Franchise Business
One of the reasons a franchise business has such a
high
potential for success is because of all that's
included in the
initial cost. In some cases, the start-up cost is
the same (or
very close) to building a business from scratch but
without all
the benefits such as established name recognition,
target market
research and existing publicity campaigns.
The A2Z of venture capital fundraising
If you are new
into the world of business, then you might have
heard of venture capital fundraising. But most
people have little or no information about venture
capitalists. There are a lot of misconceptions about
the whole thing.
6 Ways
To Fund Your New Business
Here are a few of the most common ways to finance a
new business. All methods have pros and cons and
some (or most) may not work for a specific
situation. In any case one must always thoroughly
investigate the ups and downs of any new venture
before jumping in it with both feet.
Tips to Apply Successfully for
Funding
Let’s face it, if
you don’t have a proven track record or some notable
credit worthiness, it is tough to get financing.
Risk factors and high costs of servicing small
accounts are the major reasons for banks and
financial institutions to stay away from people who
don’t have a good credit history.
Small Business Grants - Business Grants - Government
Grants for Small Business
Small Business Grants with free money from the
Government. Small Business Grants or Business Grants
to help grow your business, and Matthew Lesko will
show you how.
How The Government
Can Help You To Start Your Business
When starting your business you can
use all the help you can get, and the federal
government can be a great source for assistance.
The U.S. Small Business
Administration (SBA) was originally founded in 1953 as an independent agency of
the federal government to Aid, counsel, assist and protect the interests of
small business concerns, to preserve
free competitive enterprise
and to maintain and strengthen the overall economy of the United States.
Although the SBA has grown
and evolved in the years since it was established in 1953, its bottom line
mission remains the same. The purpose of the SBA is to help Americans start,
build and grow businesses.
Through an extensive network
of field offices and partnerships with public and private organizations, the SBA
delivers its services to people throughout the United States, Puerto Rico, the
U. S. Virgin Islands and Guam.
The SBA is an independent
agency within the federal government that operates
under the authority of the
Small Business Act of 1953.
The SBA can makes loans
directly to businesses and acts as a on bank loans. In some circumstances it
also makes loans to victims of natural disasters, works to get government
contracts for small businesses, and assists businesses with management,
technical and training programs, some of which can be done on-line.
The SBA has directly or
indirectly helped nearly 20 million businesses and currently holds a portfolio
of roughly 219,000 loans worth more than $45 billion making it the largest
single financial backer of businesses in the United States.
The SBA has survived a
number of threats to its existence. In 1996, the then newly
Republican-controlled House of Representatives planned to eliminate the agency.
It survived and went on to receive a record high budget in 2000.
Renewed efforts by the Bush
Administration to end the SBA loan program have met congressional resistance,
although the SBA's budget has been repeatedly cut, and in 2004 certain
expenditures were frozen.
SBA Loan
Programs
The most visible elements of
the administration are the loan programs it administers. The SBA itself does not
grant loans. Instead, the SBA guarantees against default certain portions of
business loans made by banks and other lenders that conform to its guidelines.
Contrary to popular belief,
these programs are not generally for persons with bad credit who can not get
bank loans, nor are they primarily used for startup funding. The primary use of
SBA programs are to make loans
for longer repayment periods
and with looser affordability requirements than normal commercial business
loans.
Also, a business can qualify
for the loan even if the yearly payment would be the same as the previous year's
profit, whereas most banks would want payment for a loan to be no more than
two-thirds (2/3) of the prior
year's profits for a
business. The lower payments, longer terms and looser affordability calculations
allow some businesses to borrow more money than they could otherwise.
One of the most popular uses
of SBA loans is for commercial mortgages on buildings occupied by a small
business. These programs are chosen because most bank programs, while having
similar payments and rates, require borrowers to refinance every five years.
How Can I
Benefit From The SBA?
The Small Business
Administration (SBA) has created a program of government-guaranteed loans
designed to help give small businesses that may not otherwise qualify for credit
get the funds they need. SBA loans make it possible to qualify businesses more
easily and provide them with more flexible terms than conventional loan options,
letting you preserve working capital for other expenses.
Qualifying for an SBA loan
is easier than qualifying for other loans. First, the SBA allows higher
loan-to-value ratios. Depending on your loan request, you may be able to borrow
up to 90% of your financing needs. Second,
we consider the projected
income of your business, not just historical cash flows, when making a decision.
This may be especially advantageous if your business is growing rapidly.
SBA loans can help growing
businesses purchase or renovate real estate, acquire fixed assets such as heavy
machinery or specialized equipment, borrow working capital for ongoing financing
needs, or fund the acquisition
of new businesses.
Who are
SBA loans for?
SBA loans are for businesses
that are:
Owner-operated
For profit
Organized as a sole
proprietorship, corporation, or professional partnership
Within the size guidelines
designated by the SBA
Unable to secure other
credit under reasonable terms SBA Loan Industry
The SBA loan industry can be
divided into distinct categories:
The largest United States
Banks, such as Bank of America and Wells Fargo, generate the bulk of their SBA
loan volume by the loans, especially the express loan and business line of
credit, being offered to those who would be declined for a normal bank loan due
to factors such as length of time in business or slightly stricter affordability
factors. These banks have sophisticated computer systems that generally makes
this process seamless, and are quite different from other financial institutions
who utilize SBA lending for separate and distinct purposes.
SBA loans are used heavily
by banks of all sizes to finance the purchase or construction of business owner
occupied real estate (i.e. real estate purchased by a business). Many banks only
offer SBA loans for this purpose. In particular, they are using to finance
properties that the bank would consider too risky to finance on their own, due
to them being of a special or environmentally risky nature that can make their
resale value limited; these properties include Motels, Gas Stations, and Car
Washes.
SBA loans are also used to
allow individuals to buy existing businesses. Since, unlike in real estate
transactions, commercial lenders are allowed to pay a referral fee to business
brokers who help people buy and sell businesses, this segment of the industry is
dominated by smaller banks and standalone
finance companies who
engage in this practice.
Criticism
Businesses applying for SBA
loans are supposed to be ineligible for financing elsewhere, as the applicant
bank affirms. Designed to avoid direct competition with banks, this provision
allows the most promising projects to be
funded by the private
sector, leaving higher risk projects to be picked up by the government,
resulting in the government holding a higher share of non-performing loans.
Though it accepts higher
risk, most SBA borrowers pay their loans, the same loans that lenders affirm
could not receive credit elsewhere. The Agency has traditionally had a currency
rate on its loans of 90% or more, not
meaningfully worse than
banks.
The SBA is also one of very
few agencies that pays its own way and does not drain the treasury for its loan
programs. Price Waterhouse affirmed, some years ago, that the tax revenue
generated by only a handful of
SBA startup loans more than
paid all the operating expenses for the Agency.
One of the primary uses of
SBA funding is for business owners to get a loan to buy the property their
business occupies. Owning the property and having the business rent the property
from the owner is a form of a
tax shelter, so the SBA has
been criticized for aiding tax shelters. Of course, legally taking
advantage of tax law provisions is completely ethical.
Various banks are often
criticized for offering or writing fewer SBA loans proportionally than other
banks, which critics see as a sign of discrimination. However, others counter
that SBA loans are equivalent to or many times worse than what the banks offer
themselves, so a customer of that bank might choose the normal bank product more
often than their SBA product.
Overall, the SBA creates a
vast avenue of opportunity for companies looking for a relatively cheap source
of capital.
For more information on the
SBA and other excellent ways to secure a small business
loan, visit our website at
Small Business Loans.
Article Source:
ArticleRich.com
<TOP>
If you are a entrepreneur
and planning to get a fund for your business, here is another option to
consider, the term loans. In this article, learn about term loans as we discuss
to you the basic points about term loans for small businesses.
Business startup financing
What is a term loan? Term
loans have a fixed length of repayment period, lasting from a year to 20 years
or more, depending on the type of loan you obtained. The amortization or the
amount of repayment that the borrower would need to submit includes both the
principal and interest of the loan.
Short Term Business Loans
Short term loans mature
within a year or less and are ideal for growing businesses that need additional
funding in the middle of operations. Lenders offers a number of short term
business loans. Examples are working capital loans, accounts receivable loans,
equity, lines of credit, etc. For instance, if a business needs funds to launch
new marketing campaigns, buy more stocks, or hire additional workers, short term
business loans provide an easy solution.
Long Term Business Loans
What about long term
business loans? Obviously, this type of term loan takes a longer time to mature
and complete. Long term business loans can have a 10-year, 20-year, to 30-year
repayment period depending on the amount of money borrowed. Long term can range
from from $25,000 to as much as $50,000 or more.
Long term business loans are
more practical choice if you are in need of large money to start your business.
Usually, term loans require collateral as a guarantee for the loan. lenders are
more strict and cautious when giving their approval when it is a long term
business loans which involves big cash.
Applicants for long term
loans should be prepared to submit all the necessary documentations that the
lender requires. Aside from the collateral, a professional business plan, along
with business licensing certificates and accounts spreadsheets are often
required to be submitted.
Your Business Credit History
Whether you're applying for
a short term or long term business loan, the status of your credit plays an
important role in getting approved for the loan. Thus, it is advised to check
on your business credit report before submitting your loan application.
Although, there are lenders who grant loans despite bad credit, these loans
usually have higher interest rates and fees. On the opposite, an excellent
business credit gives you the advantage of getting lower interest rates and
faster approval from lenders.
But what if you haven't yet
established your business credit history? In this case, your personal credit
history would be used by your lender. Obtain a copy of your credit report to
check on your credit score. Of course, a higher credit score makes you a more
qualified candidate for a business loan while a low credit score puts you at a
bad light. It is best to work out your credit fist before engaging to business
loan application if you have a very low credit rating.
Copyright (c) 2009 Irish
Taylor
Irish Taylor is a business
loan consultant with Startup Business Loans and has been providing consumers and
business owners with startup business financing since 1992. For years she has
helped people with credit and loan problems especially pertaining to
small business
loans, SBA loans and new business loans
.
Article Source:
ArticleRich.com
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Starting a Business with No Capital--Do You Have
What It Takes?
by
Jim A. McDonald
Do you want to start a
business, but you have absolutely no money to invest in it up front? Don't
despair! You're certainly not alone and you may find that your business will
actually turn out better. Chances are your business will be healthier and better
equipped to respond to change. You'll learn creative new ways to handle
different challenging situations. However, success will require a healthy dose
of time and commitment to hard work on your part.
When you don't have the
money you think you need to start a business, you may feel isolated and alone.
The truth is that starting a business with zero funds is so common that there is
a word for it--bootstrapping. The term comes from the idea that you can "pull
yourself up using your own bootstraps." Although that might be physically
doubtful, it is possible to creatively gather and apply scarce resources to
start a business. It may not be the most comfortable way to start a new
business, there are advantages to avoiding entangling relationships with
investors, lenders or venture capitalists.
Those who support the
practice of bootstrapping your new business into existence point out that
companies started in this way are usually healthier and more stable in the long
run. Why would this be so? Imagine you've just started a new business with a big
wad of cash courtesy of some optimistic investors or venture capitalists. In
this situation, there is very little pressure to make money immediately. There's
no real penalty for wasteful spending or loss of focus.
But when you're
bootstrapping a new business from a zero cash starting point, creativity and
problem solving are your highest priority. There's no safety net of cash to
catch you if you fall, so it's essential to keep your eyes on the task of
creating profit. Not only does this make you more successful more quickly, it
also provides excellent training for future periods of rapid growth. Many
businesses often have difficulty if the needs of growth are greater than current
cash flow. Business started by bootstrapping don't have this problem because
this is where bootstrappers live--using scarce resources creatively to meet the
needs of business growth.
Do you have what it takes to
successfully bootstrap a new business with zero funds? Most business planners
agree that knowledge about a particular business or industry is the best asset
you can start with. If you are an expert in a specific subject (or you choose to
become an expert in an area), then you should also have useful knowledge about
that market--the sources, the competition, the major players, the likelihood of
future demand, etc. This specialized knowledge almost always helps you to find
new opportunities and ways to creatively build a business without the need for a
fat bank account or investment fund.
If you want to start a
business from scratch without major funding, you'll have to make up the
difference with hard work and a huge investment of your time. So it's best to
stick with something you are passionate about. You need to believe in what
you're doing and believe in yourself. Successful bootstrapping will require
personal sacrifice, so be sure you start something that's worth it to you.
When it comes to starting a
business with zero funds, providing services is usually the best choice. Selling
products usually requires a cash investment at the beginning to create or
purchase inventory. Plus, you'll have to pay for storage space. But when you are
providing services, you really only need the tools of your trade, which you may
already own. Lower startup costs will increase your chances for success.
Whenever you consider
starting a business with zero funds, you should be open to help from any and all
sources. Friends and family can be excellent sources of "in-kind" contributions,
like a place to provide services or a couch to sleep on when things are tight.
Another option worth thinking about is working a part-time job to make your
living expenses and building your business the rest of the time. Once your new
business starts showing a profit, you can drop the part-time job and put 100
percent of your time into your new endeavor.
Starting a company without
any startup money may seem like a crazy idea, but people do it successfully all
the time. The businesses that emerge from this process are flexible, adaptable,
and never have cash flow worries. When you start with nothing, it can only get
better.
This
buying a business article was produced for
http://www.business-trader.com.au
Article Source:
ArticleRich.com
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What Kind of Capital Do I Need for My Business?
by
Mark Knotts
The title of this article
best describes the question that most entrepreneurs ask themselves when they
want to raise capital for their businesses. The question about raising capital
should not only be about how much capital you need, but what kind of capital you
need. Do you want to raise debt capital where you have to pay interest or do
you need more rocket fuel and need something more like equity capital? These
are all the things you should know.
Debt Capital
One of the lowest risk
investments is debt capital. Debt capital is of low risk for the investor,
because he knows that he will get his money back. For you, the entrepreneur,
however, debt capital is exactly what it describes, debt. Debt capital is also
known as debt financing or a business loan and the investor only gains about a
ten percent profit from the interest of the loan.
Equity Capital
Equity, on the other hand,
is quite different from debt capital. When you win an investment for equity
capital, you don’t pay the investor back, like you do when you raise debt
capital. This makes equity a high risk investment. The reason you don’t pay
the investor the equity back is because investors who invest equity usually
invest in companies which will exit through what is known as a liquidation
event. A liquidation event is usually when you sell your company to a larger
company or when you place your company into an IPO or an initial public
offering, which means that you are actually going to have your company stock
publicly traded in the stock markets. Now, you know a bit about equity, let’s
see how equity is categorized.
Equity is basically
privately owned assets and is categorized as either private equity or venture
capital. Yes, there is a difference between the two categories. Venture
capital, for example is private equity funding that is earmarked for investments
into small startup companies that are poised for high growth. Private Equity,
on the other hand, is invested in companies who are in their later stages and
ready to either be bought out or just primed for IPO.
Investors
Along with the different
types of capital, you also have different types of investors who invest all this
capital. Some of these investors are known as angel or private investors,
whereas others are known as institutional investors or venture capitalists.
Differentiating the different types of investors is just as important as knowing
what kind of capital you need to raise. Let’s first look at what the different
kinds of investors there are and what they do, or how they invest their money.
Angel investors are also
known as private investors and are usually wealthy individuals who invest in
companies at their whim and with their own money. Angel investors do not
really invest professionally for a profit, though some angels might do that.
Usually most angels invest to feel like they are helping someone out or want to
invest in a company that reflects their morals, values, or other interests.
Institutional investors, on
the other hand, invest on a professional basis and invest other people’s money.
Usually institutional investors invest for private equity firms. Venture
capitalists are also institutional investors who deal only with venture capital
and work for vc firms.
How Can I Get in Touch With
an Investor?
It is almost impossible to
find investors on your own. However, the internet has plenty of resources to
help you find the right investor for your company. One of these resources that
has helped me out is the Vcgate Venture
Capital Database. This database can give you instant access to over 4300
venture capital and private equity firms and has powerful affiliates who can
also provide you with valuable information about how to approach investors with
your business plan.
Mark Knotts is an
entrepreneur who was very successful in three of his ventures. He writes about
business and the character needed to handle the riggers of business. He
believes that raising capital is more involved than simply submitting a business
plan to investors. Mr. Knotts also knows and writes quite a bit about internet
marketing and consumer goods. He also recommends services that have helped him
out in his career.
Article Source:
ArticleRich.com
<TOP>
by
Wil Schroter
Business Start Up
Funding
Startup companies often get
frustrated when they can’t find investors willing to fund their new idea. What
they don’t realize is that in order to get an investment, they need more than
just a good idea and the promise of future profits. What investors are looking
for is a “silver bullet” in the business that ensures their small investment
will yield a huge return.
Business Start Up Funding - You Need a Silver
Bullet
The silver bullet is the
aspect of your business plan that proves your company can grow quickly. For
example, perhaps you’ve proven that 100 customers are willing to pay $99 for
your newly developed product. If all you need is additional cash to build 1,000
more items to sell more at that price, you’ve got a silver bullet.
Investors are compelled to
make investments in startup companies that have proven some aspect of their
business model “works” and that what they really need is more capital to make it
work better, or to sell more products.
Many entrepreneurs, on the
other hand, wander around in search of business start up funding to find the
silver bullet in their business plan and that’s a less attractive proposition.
In this case you’re asking an investor to put money into a treasure hunt, and
not into a business. Until you demonstrate you can sell something (at a
profit), you don’t have a business worthy of investment. Therefore you need to
re-focus your efforts on finding your silver bullet.
Investors Love Paying Customers
Every business model is
different, and as a consequence the silver bullet of one business may look
somewhat different than another. The common thread, however, is that each of
them show your investors you have found a facet of your business that works well
and simply needs business start up funding to be exploited.
A great place to start is
with paying customers. Even a few customers create proof that that there is an
active buying market for your product that could be even bigger if you had the
capital to reach more of them.
Notice that here you’re not
telling an investor, “if we build it they (customers) will come”. What you want
to say here is “we built it, and they already came”. This puts you in a much
stronger position to suggest that if you are capable of repeating the process
provided you have more business start up funding.
Understanding Conversion Works, Too
Maybe you don’t have a
10,000 paying customers but have found, on a more modest scale, that for every
$1 you spend in marketing you can earn $2 back. This information is a silver
bullet too. In this case you’ve proven that you understand how to acquire a
customer for less than they are spending, which is a big deal.
This may seem like an
obvious necessity for any successful business (let alone one looking for
business start up funding), but there are plenty of companies that overlook this
point. If you haven’t proven that you can profitably acquire a customer,
perhaps this is a good place to start.
Analyze the costs involved in acquiring your
first batch of customers and try to project this cost out to the next round of
new customers and the round after that. Try for those next customers and see if
your results match up with your predictions. Once you feel comfortable that you
understand your cost to acquire customers you can begin identifying specific
capital needs to accelerate that process.
Speed Things Up
Speeding up time can also be
good reason to ask for business start up funding. If you find that it takes you
two months to service a customer now, but with additional capital you could
service a customer in two weeks (and therefore earn revenue in a shorter time)
you’ve found another silver bullet.
Investors are always hungry
for businesses that could be even more profitably or grow faster if just a
little more capital was applied. Creating a strong case for this use of capital
will make it easy for investors to understand your needs.
Read, Aim, Fire!
Perhaps you only have one of
these silver bullets ready to present to investors. That’s fine, as long as you
have prepared a strong argument for why this one single factor will have such a
great influence in your growth.
Presenting your case to
investors isn’t about coming up with as many reasons for investment as
possible. It’s not about quantity, it’s about quality. What you want to
demonstrate is that you have key factors in your business that have a
demonstrated track record for growth, but need capital to accelerate that
growth.
If you’re in the process of
raising business start up funding right now, step back and take a second look at
your PowerPoint presentation. Does it clearly articulate the fact that you know
how this investment is going to ramp up the value of your startup? If not, try
taking another pass with the focus on finding your silver bullet. That’s the
type of ammunition your investors are really looking for.
Wil Schroter is the Founder
and CEO of the Go BIG Network, the largest network of startup companies and
entrepreneurs. He is also the author of the new book “Go BIG or Go HOME”,
download it for FREE at
http://www.GoBIGnetwork.com. Get your business start up funding at:
http://www.GoBIGnetwork.com .
Article Source:
ArticleRich.com
<TOP>
5 Great Tools From The Small Business
Administration
by
Seomul Evans
If you're a small business owner, you need to check out the Small
Business Administration website. You may have been reticent to visit as the SBA
has not always been perceived as the most helpful or efficient agency out there.
But they do, in fact, have some really helpful tools for small business owners
that you should see. They're not only for businesses just starting out, but also
for businesses that are well-established. Here are 5 tools to help you.
. Starting Your Business. This is a helpful section that provides
great tips for individuals who are interested in starting their own businesses.
The first piece of advice in this section is to find a mentor who can guide you
through the many steps involved in starting a small business. SCORE (Service
Corps of Retired Executives) is a great mentoring group that is loosely
affiliated with the SBA and provides free-of-charge guidance to those hoping to
start small businesses. This section also includes comprehensive information
about financing your startup, creating a budget for your business, and even a
break-even analysis.
Other information included in this section covers buying a
franchise, deciding on a business name, structuring your business, buying a
business, obtaining a business license, and how to lease equipment for your
business.
. Small Business Planner. This section includes questions to help
you start thinking about what it takes to start your own business. It also
includes a list of characteristics held in common by many successful
entrepreneurs. Finally, an assessment tool can help you determine if you're
ready to start your own business.
. Business Management. This is a great tool to help you think
about the management aspect of your business. It talks about leadership skills
that you'll need to be a successful business manager, as well as how to set up a
business meeting, how to delegate tasks to employees, networking within your
community, and running an ethical business.
. Exit Strategies. If you're chomping at the bit to start your
own business, chances are you haven't given much thought to your exit strategy.
After all, why would you be thinking about the end of your relationship with
your business before even starting it? But an exit strategy is an essential part
of starting your business because it will make a big difference in the way you
start and manage it. This section talks about getting the most out of your
company if you decide to sell it. It even goes so far as to discuss how to work
with CPAs, how to determine the value of your business, and how to announce that
you're going to sell your business.
. Tools. The SBA website has a huge selection of tools for you to
use. Do yourself a favor and just look through them. Chances are, you'll find
tools you didn't even know you needed! There are sections on regulations and
statistics, a glossary of business terms, and some stories of small business
owners who have been very successful. There are even videos, podcasts, chats,
and forms for download.
Given the reputation of general inefficiency assigned to most
government agencies, you may be surprised to find out that the SBA website is so
thorough and helpful. It certainly isn't the only resource you'll need as you
prepare to start your own business, but it's definitely a great resource to have
at the ready as you go about the physical and mental preparations required of
entrepreneurship. So add it to your toolbelt and enjoy your success!
About the Author:
Seomul Evans is a senior
SEO Expert
specializing in
Internet
Search Engines and
Small Business
Articles .
Article Source:
ArticlesBase.com
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Startup Your Business
With A Business Loan
By
Amanda Hash
It is not necessary to wait until you
have a lot of money to start up your business. The
time is now. The market may change and make things
difficult and you could be left with the bitter
taste in your mouth of not having taken the decision
at the right moment. Business is not only about
buying and selling. It is about taking the right
decisions at the right moment.
Do Not Let Others Beat You To It
If you have detected a niche in the market that you
can fill in, go for it. Do not waste time watching
to see what happens, whether it is the right moment
or not. Waiting gives your precious time to others.
Rushing to do things without a proper planning is
not good either. You have all the ideas in your
head, so just write them down, on paper or on your
computer and make a checklist of everything you need
to open your business.
Niche Marketing
Your first attempt should consider every nail and
every sheet of paper needed to get your business
going. There will always be time to cut down on
unnecessary things later on. I talked about a
“niche” above, because niche marketing is very
interesting. Once you detect the niche and the needs
it has, you tailor a product or service for that
niche and you already have a market, without having
to spend precious cash on random advertising. What
little advertising you will have to carry out, will
be specifically directed to your niche.
You will have time later on to expand and add
products to your line, innovate and improve, to
widen your scope, a little at a time, so as to grow
steadily and firmly and surpass the critical moment.
It is said that 80% of new businesses do not make it
through the first year.
Start Closing The Circle
Once you have your business plan ready, you can
start to think of a business loan. Considering what
is mentioned in the previous paragraph, every lender
knows the risks that a new business implies. So,
this risk will have to be shared, in the form of the
provision of some asset of yours, whether private or
dedicated to the business, to show confidence in
your own project.
Very few loans will be granted on the business plan
alone, however brilliant it may appear, so bear this
in mind and place your car, truck, a piece of land,
whatever it may be, as collateral from the very
beginning. Do not wait for the lender to ask for it.
Some Additional Considerations
When you start to fill in the numbers in your
business plan, consider the loan payment in advance.
If you take the trouble to calculate how much you
need and how you will repay it, making it
participate in the general cash flow, it will give
the loan officer a good impression. For this, you
will need to shop around and get free quotes, not to
be confused with applications.
The interest rate will vary slightly from lender to
lender and depending on the amount and collateral
you offer, but in general there is no great
difference. The main difference in these matters is
your decision and how you prepare your way for your
new activity.
Amanda Hash is an expert
financial consultant who specializes in Guaranteed
Unsecured Loans and Government Grants. By visiting
http://www.yourloanservices.com/ you'll
learn how to get approved and recover your credit.
Article Source:
FreeArticlesZone.com
<TOP>
How Do You Obtain
Grant Money?
by
Wendy Carmichael
We all have dreams of making and marketing some
ingenious invention, starting our own small
business, or enhancing our education. Actually every
invention, business and college graduate got there
because of a dream.
There are so many hard working people out there
setting aside their dreams and in many cases giving
up on them all together because of one major reason;
MONEY!
You’ve got to work to make money, and in order to do
that you need a home, a car, some appropriate
attire, food, gas, utilities, not to mention the
astronomical costs of health insurance. It costs a
bundle just to exist in this world, let alone trying
to set aside the revenues to reach your goal.
Most dreams require ample amounts of funds to bring
them to reality. Fortunately there are billions and
billions of dollars just waiting to find the right
person with the right kind of dream to consume
them.
Private foundations are in place to finance a wide
variety of causes. Large estates and companies
implement these foundations for a variety of reasons
and to support a plethora of causes. Donations are
tax deductable, and they also serve to support many
worthy causes.
Federal funds at both state and local levels retain
a portion of collected taxes to give to individuals
wishing to start businesses with the ulterior motive
of creating more jobs, stimulating the local economy
and generating more taxable business.
Generous individuals donate money to charitable
causes for the sense of satisfaction that they feel
to give to those less fortunate and help make the
world a better place. Thousands of non-profit and
charitable organizations collect money on the basis
of certain dispersing it for the benefit of their
cause.
In order to maintain a tax exempt status, it is
required by law that corporations donate 5% of their
revenues to charitable organizations and granting
foundations. Foundations are set up to effectively
manage and distribute the money to the appropriate
recipients.
Actually, anyone who has attempted to so a web
search on “grants” has come up with such an
overwhelming response of matching sites that they
probably got swallowed up in the giant grant quest
whirlpool!
There are far too many donors each with a specific
set of qualifications that it would take literally
months to weed through all of the awards, and then
each specific set of requirements. Without some
knowledge of how the process works and access to a
humongous database, it’s virtually impossible to
locate the grant that is right for you.
This is where Grant Research companies and Grant
Writers come into play.
USA Grant Team prides themselves on working closely
with customers to form a respectful, trusting work
relationship. They have over thirty years of
experience and an extensive wealth of knowledge of
the granting process as well as the numerous
granting agencies.
They will obtain the accurate information to
effectively correspond it with any grantors that are
donating to people or organizations in your
situation. Their expertise will point customers in
the right direction to achieve their goals.
Once they match their client with the appropriate
donor, they can assist throughout the application
process. Some foundations have extensive
applications and request very precise information.
Advanced knowledge of the process can make all the
difference.
The grant proposal is a key element and deciding
factor when bestowing copious funds upon
organizations or individuals. It explains to
grantors who you are, why you are asking for
funding, what your business or idea involves, and a
detailed plan as to how it will function. Each of
these elements of a grant proposal is important in
different ways.
If a donor is looking for a certain type of person,
grant writers would emphasize the “who” portion of
your proposal. If they are intending to fund a
specific business or idea, the “what” part of the
proposal would need to stand out.
The detail business plan is very important to show
grantors that their money will not be frivolously
frittered in a careless manner. They want to see the
most benefit from their donation, so a conservative,
effective allocation of funds will carry a lot of
weight when you’re matched up against hundreds of
other deserving recipients.
About the Author:
This is where USA Grant Team really shines. Their
grant writers are proficient in writing business
plans and their teams consist of experts in varying
areas to create a well rounded panel of specialists.
For more about getting a grant, contact
http://www.usagrantteam.com/ or call
877-872-3540
Article Source:
ArticlesBase.com
<TOP>
The Evolution of Financing a Small Business
By
David Gass
For years I have
read the popular business magazines, all having so
called experts write articles for entrepreneurs on
how to finance their business. “The top 10
strategies for financing your start-up”, “How the
SBA can help your small business”, “Personal credit
is the key for entrepreneurs” and so on. In most
cases I’m willing to bet those writing these
articles are journalists that have never had a
successful start-up. How can I come to that
conclusion you may ask? Because of the bad advice
they give.
Going to the SBA
for a loan, using your retirement funds, tapping all
your personal credit cards or giving up 75% of your
idea to an investor are all ideas I have read from
the popular magazines. The thing is, in every one
of these cases you are using your personal credit
and not separating you from your business. You are
putting 100% of your credit and assets at risk.
I have worked with
thousands of small business owners who have been
very successful without the need to use their
personal credit cards, retirement funds or fill out
stacks of paperwork and wait months for a response
from SBA backed banks. In fact I have seen
entrepreneurs with access to hundreds of thousands
of dollars without giving up a percentage of their
company or having any of the money show up on a
personal credit report. Sounds good right? Well,
there is one catch. You will need to go through the
evolution of financing your business. You can’t
start at the end. This is the problem with most
entrepreneurs. They want fast results and aren’t
willing to wait. By taking the quick fix they give
up ownership and put their personal credit at risk.
The evolution of
business financing starts with a solid foundation
for your business. A solid foundation is comprised
of several parts. The first of which is structuring
your business entity appropriately. I recommend to
every entrepreneur that you use a Sub Chapter
S-Corporation, C-Corporation or Limited Liability
Company to operate the business. This is the first
step in separating the business owner from the
business. The next phase of building the solid
foundation is to ensure the business is in
compliance with the lending markets. Several
business owners are surprised when I tell them most
lenders we work with when reviewing a credit
application will first call directory assistance to
see if your phone number is listed. It’s a simple
check, but it’s the first flag that will be raised
for them if the business isn’t listed. Why would a
lender finance a company that doesn’t want anyone to
find them?
There are hundreds
of other due diligence phases that a company must go
through in order to ensure the owner and business
are not considered “high-risk” for obtaining credit
and financing. The more a business has in place to
show that it is a real business the more likely a
lender will grant credit to that company.
The second step in
the evolution of small business financing is to
define what the business does, what makes it unique
and why it will be successful. The business owner
must create a one-page “sales pitch” for the
business, also referred to as an executive summary.
The executive summary can be used when applying for
credit, seeking investors and developing marketing
campaigns.
Business owners
need to keep in mind when seeking financing that the
most important thing for a business is to produce a
profit. Without revenue there will be no profit.
Marketing the business will help produce the revenue
and the executive summary will help create the
marketing.
Third, a company
must build a business credit report separate from
the owner’s personal credit. By working with trade
credit, the single largest source of lending in the
entire world, a small business can tap into
limitless leverage for buying goods and services
they need to start, run and grow the company. The
beautiful thing about trade credit is in many cases
it’s free money. If a vendor grants terms of net
30, a business owner has the ability to use the
vendors goods or services for 30 days without
interest before they need to pay the vendor. The
other wonderful part of trade credit is that there
are companies offering products and services small
business owners need who will report the credit to a
business credit bureau. The reporting of the trade
line will create a business credit profile separate
from the personal credit of the business owner.
Eventually the business will be able to access more
and more credit under the business name only if it
maintains a positive business credit score.
The more credit
received under the business name the more likely
other companies will grant that business credit. No
one wants to be the first in line to grant a
business $50,000 in credit, but if others already
have they will be more inclined.
Fourth, is to use
the owner’s positive personal credit score in
combination with a positive business credit score as
leverage for obtaining hundreds of thousands of
dollars in unsecured lines of credit for the
business. The key is to do this with lenders that
don’t report the accounts to the personal credit
bureaus but rather the business credit bureaus.
Many banks offer business lines of credit and loans,
however finding the right type of product from these
banks can be tricky. A business owner needs to make
sure the loan or credit line they apply for reports
only to the business bureau.
By keeping
business debt separated from the personal credit
report, a business owner has the ability to keep
their personal credit score high. The more a
business owner uses their personal credit in the
business, the lower the score will drop. Credit
scores determine the ability to buy homes, rates on
car insurance, and several other factors. Keeping a
personal credit score above 720 is extremely helpful
in the business owner’s personal and business life.
The fifth stage of
the business financing evolution is to look at other
alternative financing the business may be able to
obtain. Leasing is one key area. Why use precious
cash reserves to buy equipment or software when you
can make a small monthly payment? In addition 100%
of the payment on the lease is expensed.
The final stage
deals with investors. The majority of investors
don’t want to look at companies unless they have
already progressed through the business evolution
stages outlined above. Keep in mind that an
investor is not just investing in a business they
are investing in the business owner as well. If the
business owner has tapped every available resource
for credit and cash personally and never taken the
time to establish business credit, financing or
lease arrangements an investor will toss that
company’s proposal in the garbage quickly.
Not every business
owner will find themselves at the stage they need an
investor. They may have a combination of enough
cash-flow, credit and financing in place from the
early stages that they won’t need additional
capital. However, if a business needs to grow with
the help of additional capital or financing there
are two typical ways an investor will look at the
deal.
The first is
through debt financing and the second equity
financing. Debt financing with an investor is where
they provide a loan to the business in exchange for
a pre-determined amount of interest. Equity
financing is where an investor puts money into a
business in exchange for ownership. There can also
be a combination of debt and equity.
The majority of
small business owners believe this is where they
should start, with the investor. In reality this is
the last place a business owner should look.
Investors want to use their money to grow a business
by having the money spent on revenue generating
activities. The typical small business owner that
goes to an investor says “I need a million dollars
to start my business.” When asked what they’re
going to use the money for they say, “start-up costs
and payroll”. This is where the investor walks
away. No investor wants to fund a project so the
business owner can make payroll, buy office
furniture, equipment or office supplies.
This is the
perfect example of the evolution of business
financing. The company starts out as an idea, then
structure is put in place. Next, the business
becomes real with licenses and a sign outside the
building. Next, the business creates an identity
with the right message. Then the business obtains
trade credit that separates the personal and
business credit in order to obtain larger lines of
unsecured credit. All of which is used to build the
infrastructure of the business without maxing out
all the available credit for the business or
business owner. Last, the business has the ability
to seek investors because it has done everything
required to create the solid foundation.
Receive the
booklet
How to
Build Business Credit by David Gass – President
and Founder of Business Credit Services. It will
share with you how more than 10,000 businesses
across the nation have achieved over $175 million in
combined financing in their business name only, all
using his patent-pending system to
build corporate
credit separate from your personal credit.
You will also
learn the first steps required to getting a
business loan,
lease, and other lines of credit without the use
of a personal credit check or guarantee.
Article Source:
EzineArticles.com
<TOP>
Great Ways to Cut the Cost of Starting Your
Franchise Business
by Candice Clem
One of the reasons a franchise business has such a
high
potential for success is because of all that's
included in the
initial cost. In some cases, the start-up cost is
the same (or
very close) to building a business from scratch but
without all
the benefits such as established name recognition,
target market
research and existing publicity campaigns. With so
many
advantages, it can be difficult to understand why
entrepreneurs
choose to launch a business alone. Nevertheless,
some of the
high costs associated with franchises can become a
deterrent for
prospective buyers. What many of them don't
realize is that
there are several options that help cut the cost.
Options for Financing Your Franchise
Many franchise opportunities come with a sizeable
price tag. Few
prospective business owners can afford to make such
an
investment without some financial assistance.
Unfortunately, not
all of them will have access to the necessary
capital it will
take to satisfy start-up costs, franchise fees,
royalty fees and
a loss in revenue that will continue until the
return on
investment finally begins. If you have a
well-established credit
history (free of bankruptcies and established to the
point where you're considered as having enough credit), you
may be able to
get a conventional loan through a bank or credit
union.
However, banks are typically reluctant when lending
to small
businesses. In reality, they rarely do so. Though
not everyone
will qualify for conventional loans, there are still
options. If
you have applied for credit to no avail, you can
contact the
Small Business Administration, an agency run by the
federal
government. The SBA guarantees a certain percentage
of its
loans, which puts lenders at ease because they are
less likely
to experience a loss. Plus, the SBA is usually
willing to lend
for longer periods of time and at larger amounts.
Of course, the SBA has specific criteria to
determine
eligibility. First, it must be a small business,
which
translates to less than $13.5 million in retail or
service
sales. Additionally, it must be located in the
United States or
a U.S. governed territory and only those interested
in opening a
for-profit business can apply. As you can imagine,
this agency
reviews countless applications, which means that you
must handle
yourself in a very professional manner. It is always
a good idea
to have your business plan ready before meeting with
anyone
regarding financial assistance, even a government
agency.
However, the main disadvantage to getting an SBA
loan is that
the interest rate is set by the Treasury Department,
which means
that it is variable. Moreover, this interest rate is
generally
higher than those offered by conventional loans.
Thus, if you
can find a close friend or family member who is able
and willing
to lend you the necessary funds or even cosign, this
is your
best option next to financing on your own through a
bank.
Economic Development Corporations
The federal government is not the only entity that
provides
monetary assistance to potential franchise owners.
More and more
state and county governments are pitching in with
tax exemptions
and other special programs. The New York City EDC,
for instance,
issues low-cost tax exempt bonds as well as double
and triple
tax exempt revenue bonds (these are technically
issued by the
New York City Industrial Development Agency, NYCIDA,
an entity
of the NYCEDC). Furthermore, this agency can even
administer
public loans. The only issue to consider before
accepting
assistance from an EDC is the fact that much of the
available
funding is dedicated to improving low-income or
developing
areas. Nonetheless, EDCs have funds available to
prospective
business owners like you. And, you have the
opportunity to
impact a struggling community. Still, before you
decide to
locate your franchise in such a community, make sure
it is
conducive to operating a profitable company.
Community Development Corporations
These non-profit organizations are dedicated to
improving their
local economies by lending money to small
businesses. The goal
here is to increase revenue and bring new jobs to
the area. What's more, CDCs are well known for developing
affordable
housing and improving education for residents in
low-income
areas. Once again, you must weigh the costs and
benefits to
starting a business in developing or otherwise lower
income
sections of a town or city.
Business Development Corporations and Venture
Capitalists
If you're weary of relying on public funding, you
have the
option of appealing to a business development
corporation or
venture capitalist in your territory. Returning once
again to
New York, its business development corporation is
made up of
financial institutions that pool their resources in
order to
lessen the risk. Rather than focusing on low-income
sections of
the state, this organization is devoted to helping
all kinds of
different businesses gain access to financing. The
primary
concern is to expand New York State in general.
Venture capitalists, on the other hand, are
different from
development corporations because they assume some
ownership of
your business. Because of this unique feature, they
are willing
to take more risks than traditional lending
institutions.
Depending on your specific industry and the stage of
your business's development, you may be able to find a
venture
capitalist fund to help finance your business.
Take Your Time
While there are opportunities for financing your
franchise
business and dramatically reducing your initial
cost, keep in
mind that some franchisees use their own resources
for as much
as 50 percent of their start-up expense. If you can
not afford
that kind of investment, consider working for a
couple of years
and saving some of the money for yourself. If
you're able to
generate some revenue this way, you are more likely
to qualify
for a conventional loan. Otherwise, you will appear
more serious
to business development corporations and reputable
venture
capitalists. Thus, if you decide to wait after all,
don't
become discouraged. Instead, use the extra time to
conduct
additional research and perfect your business plan.
Sooner than
you realize, investors will be eager to take part in
your
project.
About the author:
Find
franchise opportunities and information for
entrepreneurs at
Franchise Gator.
Article Source:
GoArticles.com
<TOP>
The A2Z of venture capital fundraising
by
Ganesh
If you are new
into the world of business, then you might have
heard of venture capital fundraising. But most
people have little or no information about venture
capitalists. There are a lot of misconceptions about
the whole thing.
In simple words
venture capital is the money that is invested by
venture capitalists in new and upcoming companies
that have the potential to grow into major giants.
If you think that venture capitalists are wealthy
financers who wish to finance any new venture, then
you are misinformed.
Most venture
capitalists are privately owned corporations with a
huge pool of money that comes in from pension funds,
endowment funds, corporations, foreign investors and
wealthy individuals.
But most venture
capitalists have high expectations when it comes to
returns. You can always expect a venture capitalist
looking for a 10 fold return or more within a period
of 5 to 10 years.
Criteria
Most venture
capitalists will only finance small start up
ventures. But there are some who need companies with
a proven and established base. Also the venture
capitalist will have an equity ownership in the
business. They take part actively in management and
related decisions.
Some capitalists
also help in the development of new services and
products. As the risks are high, the expectations
for returns are also equally high.
Financing
If you are looking
for venture capital fundraising then there are many
directories and associations that have memberships
with several venture capitalists.
You can register
with such associations to get links to individual
Venture capital firms. Their guidelines and examples
of the kind of companies that they have financed in
the past are some of the details that you will get
with such directories.
Some directories
have links with as many as 1500 venture capitalists.
With a nominal fee that may range from $1000 to
$1500, you can submit your ideas and get exposure
when it matters the most.
For more
Information on Venture Capital Fundraising, Venture
Capital Funds Visit
ibfconferences.com
Article Source:
ArticleRich.com
<TOP>
I’m often asked:
what is the best way to finance a new business
venture. This question is usually followed by "So,
do you ever invest in new business ventures?"
The answers,
respectively, are: 1. there is no "best" way to fund
a new business; and 2. I do invest in new business
ventures, but darn it I can’t today because I left
my checkbook in my other suit.
The truth is there
are a variety of ways to finance a new business and
which way is best for you depends totally on your
product, your market, your financial requirements,
your burn rate, and most importantly, your personal
and financial situation.
So with that in
mind, here are a few of the most common ways to
finance a new business without hitting old Tim up
for a loan. Keep in mind that all methods have pros
and cons and some (or most) may not work for your
specific situation. No matter what financing method
you choose thoroughly investigate the ups and downs
and don’t jump in with both feet until you’re sure
you’ll land on solid ground.
Savings and
Investments
The first source
you should consider tapping is your own savings and
investments. I’m a huge fan of self-financing when
it comes to business because it doesn’t make you
responsible to others should the business fail. The
bad thing is that it if things do go under, it will
be your money that goes down with the ship. If
you’re not willing to risk your own capital you
certainly shouldn’t be willing to risk anyone
else’s.
Friends and Family
After tapping
their own savings and investments, many
entrepreneurs turn to friends and family for help.
This works well for some, but here’s the creed I
live by: NEVER borrow money from anyone you have to
eat Thanksgiving dinner with. Nothing causes tension
in a family like lending money that is never paid
back. And notice I say "lending money" rather than
investing money. Venture capitalists invest money.
Your relatives lend you money. They will expect it
back someday even if they say they won’t. Remember,
when a loved one invests in your business they are
emotionally investing in you. It would be tough to
tell mom and dad that their favorite son lost their
life savings because his business went down the
drain.
Credit Cards
I financed my
first business on credit cards, which was an
incredibly stupid thing to do given the fact that my
business could have failed and left me with
thousands of dollars in credit card debt that would
have taken until the year 2099 to pay off. It worked
out in the end for me, but if you decide to finance
your business on plastic keep in mind that you will
be paying extremely high interest rates on the money
you’ve borrowed and unless you hit it big you will
be paying for that money for many years to come.
Mortgage The Farm
Bank loans are
next to impossible to get if you don’t have
collateral and a track record of business success,
which is why many entrepreneurs use the equity in
their homes to finance their business after being
turned down for a bank loan. While this makes more
sense than building a business on a deck of credit
cards, the financial risks are no less abundant. You
must pay this money back whether your business
succeeds or not, but it is a good source of low
interest money to get you started and the interest
may be tax deductible (check with your accountant to
make sure).
Angel Investors
An angel investor
is typically a wealthy individual who invests in
start up ventures for a share of the ownership.
Angel investors are usually the first formal
investors in a business and provide the seed money
to get the business up and running. Some angel
investors will write you a check and leave you alone
to run your business while others consider their
investment a license to "help you" manage and make
decisions. If you do accept angel money make sure
the terms are clearly defined on both sides. Angel
money always comes with strings. Make sure you know
whether those strings come in the form of a bow or a
noose before you accept an angel’s check.
Venture
Capitalists
Venture
capitalists are to angel investors as pit bulls are
to Chihuahuas. That’s not to say all VC are big, bad
dogs, but they do have powerful jaws that can chew
up your business and spit it out if things don’t go
their way. VC money doesn’t come with strings, it
comes with chains and locks and lots of legal
documents. VC always have the upper hand in any deal
they invest in. That’s just how it works and that’s
the price you pay to get access to VC money.
If your business
gets to the level that VC money becomes a viable
option, don’t jump at the first bone a VC dangles
before your eyes. If one VC likes your idea, others
will, too. Present to multiple VC and carefully
consider each offer before you accept the check.
Just remember, no
matter how you finance your business, use the money
wisely. Don’t buy $1,500 plasma monitors and $1,000
Hermann Miller chairs.
Have a very clear
plan of how the money will be used and how it will
be paid back.
And remember this,
the more you can shoestring the business, the more
of the business you will own in the end.
Tim Knox
Entrepreneur,
Author, Speaker
Tim Knox is a
nationally-known small business expert who writes
and speaks frequently on the topic.
For more
information or to contact Tim please visit one of
his sites below.
http://www.timknox.com
Article Source:
ArticleRich.com
<TOP>
Let’s face it, if
you don’t have a proven track record or some notable
credit worthiness, it is tough to get financing.
Risk factors and high costs of servicing small
accounts are the major reasons for banks and
financial institutions to stay away from people who
don’t have a good credit history.
However, the
silver lining in the cloud is - business finance,
small or big, is the bread and butter for banks and
other financial institutions. If you can convince
them that you are a good investment opportunity, you
are on!
Following tips
might make your application irresistible for banks
or other institutions.
1. Be Thoroughly
Prepared: You need to satisfy the lenders
regarding your track record and your future
viability. The documentation required for this has
been discussed in my other article All About Small
Business Funding.
If you are just
starting out, you need financial projections for at
least next three years. A financial projection
typically comprises of:
• Estimates of
your income and expenditure
• Working capital
estimates
• Cash flow
statement
• Projected
Balance Sheets
• Precise loan
utilization detailing
• Profiles of
decision making people i.e. top management who would
be handling the project(s) for which you need
financing
• Comprehensive
business plan
Some of these
documents require professional expertise and you
would need a professional accountant to
prepare them.
You would also
need the following documents apart from above
mentioned documents, if you are already an
established business and want a small business loan
to fund your working capital requirements or your
expansion plans.
• Copies of the
Balance Sheet, Profit and Loss statement, and tax
returns of the company
• Personal
financial statements and tax returns for last three
years
2. Anticipate
Questions: You need to be well prepared, and need
to have a fair understanding of the lending process
to anticipate questions you are most likely to face.
Remember, lenders
need to be convinced about your loan repayment
ability. Ideally your business plan should also
include answers to your banker's questions. The most
frequently asked questions are:
• How
much money do you need? Be exact! You can add a
little extra for contingencies.
• Long
term or short term? Be prepared to go into detail
supported by your documents, the time you require to
repay the loan.
• What
are your loan utilization plans? Explain whether
it is for capital expenses, working capital, and
expansion or to set off old debts.
• How
you will repay it? You got your cash flow
projections here to explain repayment time frame.
Use your financial projections and business plan to
convince the banker of your repayment capability.
3. Don’t Be
Apologetic: Remember; banks look for good
opportunities to invest. Be confident that you are
one of the better opportunities the bank has come
across and project that confidence to the banker. It
is a deal on equal terms. Banks are not doing you
any favor by giving you a loan. You are giving banks
good business too. You are an entrepreneur who can
and will repay the loan.
4. State the
truth and back it. Bankers are very smart people.
If you make any unsupported grand statements, take
my word, they will see through it, and you will come
out looking as someone who is desperate for a loan.
And bankers don’t touch such people with a barge
pole! Better idea is to keep your projections,
documents, figures and your statements on the
conservative side. You will cast an impression of a
cautious and methodical person.
5. First
impression is the lasting one. Dress in a
professional manner for the interview. All the loan
documents must be typed; handwritten documents look
unprofessional. This is a business transaction, so
treat it as such.
Last but not the
least, a word of caution: getting approval for a
business loan is good and you are almost through to
your path to realizing your dreams. But don't forget
to read the fine print. Loans have hidden costs such
as: annual fees, bank charges, closing costs,
commissions, and balloon payments. So stay focused
and clear-minded about these riders during the loan
process. Be sure about your goals, keep focused and
work according to the plan. Your small business finance requirement may turn out to be just the dose
you needed to turn your dream big!
Antony Eldwin is
CPA and runs a firm specializing in counseling for
business finance. He is also attached to several
financial institutions as consultant. He is a well
respected professional in Small Business Financing
. His articles in various forums have been well
received. For more information please visit:
www.MerchantCashDirect.com.
Article Source:
ArticleRich.com
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Why Is the
Government Willing To Offer Grants for Small
Business?
Are you an
entrepreneur in need of a business or small
business grant? Do you feel that you are skilled
enough and motivated to start a small business of
your own? Are you in need of free money to start a
business but have got no idea where to start? You
don't need to look any further; there's hope for
your business. As a motivation to personal business
owners, the united States government will designate
several million dollars in grant money to assist
small and personal businesses to grow and thrive.
Each year there are millions of unclaimed dollars
due to a lack of information regarding grants from
the government. Thanks in large part to Matthew
Lesko, there is more knowledge out there about how
to obtain grants for college, small businesses,
paying bills, etc. Matthew Lesko is the writer of
dozens of books to train and educate people who are
just like you on the way to be given grants for
small businesses through the United States
government. The average person might feel a bit
leery about any opportunity to receive free
government money and may start asking the following
questions: What's really the catch to being given
small business grants? How does the government
benefit from investing in small businesses? What can
I do to receive more information and tips about
small business grants?
It's said that
almost half of small businesses aren't going to make
it past their first year. Why aren't more small
businesses more successful? A lack of experience and
not enough funding are the two of the most familiar
reasons why so many small businesses won't make it
beyond their first year. Why would the government
give out small business grants to help entrepreneurs
and the self employed with start up expenses if
there is so much failure in small businesses? How
can the U.S. government have such an interest in
small businesses? Small businesses are likely to
represent ninety five percent of all employers in
the United States. Likewise, they produce half of
our gross domestic product. Grants for small
businesses are provided to business owners in order
to promote growth and improvement in the economy.
Three quarters of all new jobs in America are
offered by small businesses.
The United States
government does not give out federal money for
beginning small businesses. The SBA, or Small
Business Administration is a Federal government
agency which provides resources, protects the
interests of, supports, and advocates small business
issues. The government has left it up to each
individual state to give money with state grants to
help small businesses to develop and flourish. Small
businesses are a critical part of the economic
security of the United States of America. With this
in mind, the SBA has a mission to devote both time
and funding into assisting entrepreneurs and the
self employed so that they can start, create, and
grow small businesses. Providing a support system to
new businesses by providing a small business grant
is a small gesture when the economic improvement of
the country is a factor.
If you are an
entrepreneur, the U.S. government provides small
business grants so that they can help your business
to succeed. If you feel that you need some
assistance finding these small business grants, it
would be a great advantage to hear about what
Matthew Lesko has got to say about free money that
might be made available to help your new business to
develop and grow. His research shows that about one
million business owners are awarded small business
grants each year. These grants may be available
through the local government of your specific state.
It's important to keep in mind, that through helping
small businesses to grow and develop, the American
economy can grow and flourish as well. Small
business grants are incentives to business owners
and to the economy of the country. The more small
businesses that are developed, the more jobs will be
available. To protect small business development,
the government helps provide small business grants
along with additional resources that are mandatory
for a business to thrive and grow.
About the Author:
Learn how to get A Small Business Grant! Matthew
Lesko.com can show you how you can get the
available money, regardless of your company's income
amount, credit or age! Look over this site for a
preview that is absolutely free:
right now! For more general information and
recommendations regarding Small Business Grants,
click here.
Mr. Lesko is a
writer that has written and published numerous books
on how to get government grants for things like
housing, bills and college. He can show you how with
information on small business grants at
http://www.matthew-lesko.com .
Article Source:
Free-Articles-Zone.com
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How The Government
Can Help You To Start Your Business
by
Simon Soeters
When starting your business you can use all the help
you can get, and the federal government can be a
great source for assistance. You may wonder in what
ways they can help you to get
started. Here are three areas the government offers
help in getting your new business off the ground.
You need money to start your business and the
government can help you get the cash
you need in two ways.
First option offered would be a loan. The government
has hundreds of millions of dollars in government
funding set up for small business and entrepreneurs.
There are
loans created specifically for low-income
businesses, handicapped individuals, military
veterans and more.
The second option for funds would be one of the
fifteen hundred grants that are available through
fifty-two government agencies. The grants are
separated and grouped by state and business
category. Such categories include but are not
limited to agriculture, general business and real
estate. You can also find grant money for research
and development of your business. Many of these
grants start at five thousand dollars and can end in
the six figures. Best of all these do not have to
be paid back. It's like receiving free money.
Take this note: this is about US. Maybe in your
country it is different.
So you know that money can be found, but what about
other assistance. The government has this covered
also. They offer assistance for small business
expansion, development and renovation. There are
fifteen hundred government sources to provide the
needed assistance for small businesses. A place to
start looking for this information would be the SBA,
or small business administration office. You can
find this in your phone book, online or the help
desk at your local library. Through the government
you can receive counseling, training to improve
skills to help manage and operate your business.
There are some forms and guidelines that are to be
completed. For some examples of these forms and more
detailed information you can read source books on
finding government as well as private foundations.
These books can be found at your local library also.
Money and assistance are no longer a concern.
Lastly the government offers advisory services to
you. These services will assist you in improving
your management skills and labor management
relations. This is very important knowledge when
beginning business. There is so much the federal
government can do to help you get your business up
and running. It's just a matter of taking the time
to find your local sources and get the process
started. Be sure to take advantage of these offers.
It's not everyday someone will hand you free money
that will go to making yourself more money. So don't
wait any longer, get the process started and you'll
be well on your way to a flourishing, successful
business.
About the author:
Simon Soeters
To find the best home based business ideas and
opportunities so
you can work at home visit:
http://www.wealthyrich-internet.com
http://www.wealthyrich-internet.com/blog
http://www.wealthyrich-internet.com/articels
http://www.pluginprofitsite.com/main-18719
Article Source:
GoArticles.com
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