Startup Financing Tips For Your Small Business

Getting a startup loan for your small business can be a pretty daunting experience. You need the loan to get the business started, but the bank needs you to be in business for 2 years in order to get the loan in the first place. Talk about a catch 22! As much as we like to bash on bankers, you have to look at it from their point of view. They are not in the 'investment' business, but they lending business. Their job to their investors is to make sound investments in solid companies so they can appease the shareholders of the bank. Having said that, here are some tips for finding the financing you need to get your business off the ground and going.

1. Find a partner-You bring the knowledge and he brings the cash. Don't get too excited and forget about the big picture though. If you need $10,000 and your partner puts in $9,000 and you $1,000, remember that if that business grows to 10 million that he is entitled to 90% of those profits. Keep a situation like this in mind when you are thinking about bringing a partner on board.

2. Go to family-Your family, hopefully, will be a little more willing to lend you money than a bank. Plus, you won't have to answer as many questions! Just make sure that you have an understanding family and make it a point to make a formal arrangement to repay them.

3. Home Equity Line-Really, this is many times the only way that a business will give you a loan. Your equity is probably your most substantial asset so its only natural that it makes sense to utilize it. Qualifiying for a Home Equity Line is a quick and easy process, much less so than a commercial loan.

4. Credit Cards-Not always the best option, but it will at least get you the capital that you need to get started. Make sure you shop around for the best deal and have a plan for repaying it. Its probably easier to do this on the personal side as well and then just make a loan to your new company for the amount that you put on the card.

5. Bank Loan-I know we already talked about this being a tough option, but if you go into the bank with a plan, you can probably get them comfortable. Just be aware that you are going to have to do some bending to get them comfortable. If you can get them to consider doing the loan, then its all negotiation at that point. They might insist on convenants, shorter terms, or pledging of all available personal assets.

Hopefully these tips can help get your small business off and running!

About the author

Dave Roth runs a website at http://www.small-business-finance-tips.com. The site helps small business owners educate themselves about business startup loans, commercial mortgages, and other options for small business owners.

Additional articles in Financing

Credit Cards – Compare Offers Online 4 Simple Tips For Picking The Right Texas Family Health Insurance Plan Choosing A Business Tax Service How to Get a Green Card commercial Remortgages ADVANTAGES OF A COMMERCIAL MORTGAGES Where Can You Get Payday Loan At The Time Of Your Needs? Manage Your Business Cash Flow Finding Help For Businesses In Financial Trouble Facing SBA Loan Default? This Is What You Should Do Federal Student Loan Consolidation in 2007 Selling Your Business - What Would Sam Zell Do? Business Grant Money Information Applying For A Business Loan Loan Officers Beware: Exposing the Loyalty Myth Common Mortgage Terminology Explained Receivables Factoring Companies: Learn How You Can Expand Business Options Invoice Factoring: Ask Detailed Questions & Choose the Best Invoice Company Some Of The Reasons You May Need To Consider A Commercial Loan Equipment Finance Provides What Your Business Can't Survive Without Student Loan Refinance And Its Value To Students Refinancing: Does it go Better with Fixed Rate Mortgage or Adjustable Rate Mortgage is Better Option Refinancing Home Mortgages to Extend Your Term Turning Gray Into Green Refinance Advisors And There Are Plenty of Them Various Aspects of Refinancing Refinance Loan Options And Know-how Multifamily Refinancing, The Right Choice for You Refinance Your High Interest Current Mortgage Documents Needed to Refinance Cash out Refinancing Best Refinance Options For Your Particular Case Streamline Refinancing Re-Refinancing is the New Theme Fundraising Tips That Will Get More Money For Your Cause Funding A Business With A Bad Credit History Interest Only Refinancing And Its Benefits Refinancing or Home Equity Loan: Which Way to Go? Refinancing Home Loans. Does it Really Make Sense? Adjustable Rate Mortgage and Refinancing Strategies Refinance Rates to Get The Best Deal Auto Loan Refinancing Strategies Refinancing Home Equity Loans What Does Refinance Mean? Refinancing Comes with Hidden Costs FACTORING: What's In It for You? Cash Advances In Commerce Property Rights and the EU Transferring Money Overseas Using Wire Transfers Top Seven Ways Writing Articles Can Explode Your Business

Please Rate This Article

Select Rating Excellent Very Good Interesting Fair Could Use Improvement

Number of ratings: 0
Rating: 0