How to Finance a Small Business

Many sources of funding exist, but which one you choose will depend on a variety of factors.

Difficulty: Moderate

Instructions

Things You'll Need:

• Accounting Services
• Business Loans
• Credit Reports
• Small Business Credit Cards
• Business loans

1. Decide how much money you need to start or expand your business.

2. Write a business loan proposal that outlines your company's financial history and projected profits.

3. Get a credit report.

4. Apply for a bank loan if yours is an existing business. Banks typically do not lend to start-ups.

5. Apply for a Small Business Administration secured loan. Start-ups may need significant assets and capital to qualify for one.

6. Opt for one of the Small Business Administration's loan programs designed to provide start-up capital or, if you fall just short of qualifying for a bank loan, to purchase commercial real estate.

7. Consider a personal loan if you require only a small amount of money or have poor credit.

8. Apply for a line of credit at your bank if yours is an existing business in need of a flexible source of capital.

Tips & Warnings

• Contact the Small Business Association to find out what loan options are open to you.
• Develop a history with your bank before applying for a loan.
• Time your loan proposal to coincide with an upturn in the industry. Banks are hesitant to loan money to businesses that are part of an industry in a downturn.
• Include interest in a personal loan, or the Internal Revenue Service may treat it as a gift.
• Pin down banks on exact fees and interest rates.
• Every request for a loan or line of credit will show up on your credit report, so plan carefully.
• Avoid personal loans if you are uncertain you will be able to repay them.

[biz2credit]

on 10/31/2009 I run a small online business marketplace -- http://www.biz2credit.com/ -- that connects entrepreneurs with possible lenders and financing options. We analyze a business’s
financial strength and the available loan products from our lender network. We have a large network of national, regional and local banking institutions that use our system to locate businesses in need of SBA financing. The site is easy to use and we’ve definitely seen an uptick in small business loans funded on our platform. Small business loan products vary widely in structure, as do the priorities and strengths of the businesses that are pursuing them. You can also get information and advice from our expert network of business owners.

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[crystal6686]

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[carolinhauser]

on 6/2/2009 Lucyyy saidPlenty of service businesses can be launched with very little capital -- and no debt. Before you assume you need a loan to start, at least take yourself through the mental exercise of how you could start your company with nothing but the money you have in your own savings. Maybe you could bootstrap it a little more than you at first planned. Remember, businesses are to make money -- not spend it.Exactly, the most important thing you will need to learn is marketing.Hiring a professional will eat up all your money and then some.You can learn all you need to know about cost effective and low budget marketing.The internet makes it possible to get the word out about you and your services even if your budget is a shoe stringCarolin - publisher EmpoweredBusinessWoman.com

[omghow]

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