As a start up, you need to find funding for new business. You may have the idea and the manpower to start your own business, but finding the capital you need to secure it can be one of the most difficult hurdles you face. While you certainly can get help from family and friends, the process of borrowing money or getting a personal loan can be cumbersome and extremely expensive. Your first choice for finding capital for a new venture should be to visit local banks and credit unions. They have professionals who work with small businesses on a regular basis and know how they go about obtaining new business loans.
You should consider meeting with a business broker to discuss the best possible financing options for your new business. There are some fees involved in working with an agent, but the fees can be well worth it if you can find funding for your new business. It is important to keep in mind that business brokers do not provide financing. However, they can match you with a lender that will provide you with the cash you need for start up costs or operations.
When you start your search for a lender, keep in mind that you will have to put up some collateral for the money you receive. If you are planning to start a business in a high risk industry, such as food processing, then your credit score and business history will be especially important. For example, if you have startup debt of ten thousand dollars or more, then you may be turned away by many banks, credit unions, and other lending institutions. Your only hope for approval might be a secured loan of five thousand dollars or less. As long as you can prove to a prospective lending institution that you have adequate collateral and can repay the loan, you should be able to find a good fit with the right lender.
For many start up businesses, the Internet is a great source for funding for new business. In fact, there are many websites dedicated solely to small business owners who are looking for venture capital or angel investors to fund their ventures. These sites allow you to post information about your business, contact potential investors, and find their contact information. In addition, many of these sites also offer a directory of investment companies that you can approach for funding.
Before you approach any finance or angel investors, it is absolutely necessary that you have a well written, well organized business plan. In the investment world, a good business plan is akin to gold. If you can’t create one, then you aren’t likely to find financing for your business venture.
Even after you find a few different sources of capital for your business, you will still need to present your business with a final business plan before you are considered for a loan. This final business plan will be a projection of your future profits and losses based upon the initial aspects of your business. It will show how much you expect to pay back each month as well as what you plan to do in the future to increase your profits. This final business plan will go a long way towards convincing any financer or investor that you are a qualified candidate for a small business loan.