Things You'll Need:
- Small business idea
- Start-up operating, marketing and financial plan
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Step 1
Think through your new business idea. Gaps in your thought process can come back to create disaster in your financing efforts. Lenders and investors expect you to be an expert on your business plans, and any falters can cause potential funders to "pass" on your financing request.
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Step 2
Create a business plan appropriate to your business. If your new business is rather simple and straightforward, keep your plan simple but complete. Should you wish to start a more complex business, you may need a more detailed and sophisticated business plan, with extensive financial projections, graphs and a higher level of narrative comments and explanations.
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Step 3
Check your personal credit report and score. If you have a high credit score, you should receive positive feedback from lenders and investors alike. Should your credit report have some "blemishes," you'll need to become a bit more creative. Depending on your available time, work to increase your score as much as possible before trying to get business credit.
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Step 4
Be prepared to sign personally for any credit offered. A new small business seldom qualifies for credit in its own name. Since it doesn't yet exist, it has no credit standing and won't until it has developed at least a limited "track record." You typically will, at a minimum, be required to provide personal guarantees of repayment, even if you are allowed to get credit in your new business name.
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Step 5
Ask for the funds. This may sound too basic and obvious, but many budding entrepreneurs lack experience getting financing for purposes other than autos and mortgage loans. Getting credit for a new small business involves much more creativity and directness. Lenders or investors must have confidence in your business idea and in you. Following the steps above will lay a potentially sound base for your financing request, but you still must ask for the funds with confidence and enthusiasm. Be prepared to offer personal assets, even your home, as collateral. Be direct and self-assured.
