How do you get financing for a small business?

Financing for a Small Business This is advice on small business financing from the Federal Consumer Information Center and the Small Business Administration: One key to a successful business start-up or expansion is your ability to obtain appropriate financing. Raising capital is the most basic of all business activities There are several sources to consider when looking for financing. Explore all your options before making a decision.

These include: personal savings friends and relatives banks, Co-operative Societies and credit unions venture capital firms Customers/Clients Private Equity Angel Investors Industries Development Board of Governments/States To be successful in obtaining a small business loan, you must be prepared and organized. You must know exactly how much financing you need, why you need it, and how you will pay it back. You must be aware of the bank's loan policies.

Lending institutions generally require fully secured loans and sufficient commitment of capital by the borrower Small Business Loans The U.S. Small Business Administration (SBA) assists small business owners to start and expand their businesses by helping them get loans through private banks and financial institutions SBA Loans for Veterans - offers a few loan programs to assist veterans and members of the military community USDA Rural Development Loans - If your business is located in a rural community, you might consider the U.S. Department of Agriculture (USDA) has a Business and Industry (B&I) Guaranteed Loan Program Other federal loan programs serving small business concerns, visit GovLoans. Gov, the U.S. Government's central database of government loan programs State and Local Loan Programs - Many state and local governments also offer low-interest loan programs that they guarantee through commercial lenders. Contact your local Small Business Development Center to get assistance with locating state and local funding sources for your small business Venture Capital Financing Small Business Investment Companies (SBIC) - In 1958, Congress created the Small Business Investment Companies (SBIC) program to help small U.S.Companies raise capital.

SBIC's are privately owned and managed investment firms that provide venture capital and start-up financing to small businesses Active Capital (formerly Angel Capital Electronic Network - ACE-Net) -Active Capital is a nationwide listing service that connects entrepreneurs with angel investors. Potential investors can obtain information on start-ups and expanding small businesses seeking $250,000 to $5,000,000 in venture capital. Active Capital's main benefit is that it allows entrepreneurs to directly access a nationwide network of investors while complying with federal and state securities regulations There are lots of places you can get funding for a small business idea.

Avoid people offering quick money solutions online - instead, approach respected lenders, trusts, and groups that specialize in small businesses - you can find a lot of help from your local government, and many banks offer special advisers too Write a good plan that covers your first year to 18 months of trading. Do a basic cash flow forecast so that you can show trends in how well your business will do - is demand all year round, or seasonal? Often business are profitable in the long term, but it is short cash flow issues that cause problems - when you have you pay your bills with 30 days, for example, but your customers don't pay you for 45 - you will need to show that you always have enough money to cover your expenses SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance.

These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments. http://www.sba.gov/services/financialassistance/grants/index.html A true business credit card is a line of credit that is taken in the name of the business, under the business' credit. Activity, whether good or bad, is reflected on your business' credit report through D&B and other financial institutions, and the liability for any debts incurred and bills owed is with the business However, some companies out there offer "business" credit cards which they require a person guarantee for.

These institutions will often ask for a personal guarantee, and will almost always ask for a social security number from the person applying for the card. If this is the case, the credit card is not a business credit card, but is simply a personal credit card which is used for the business. The business is not liable for bills and debts - you are When applying for a credit card for your business, watch out for areas asking for your SSN (and not your TaxID or EIN) and be wary of any credit card that asks for a personal guarantee.By ensuring that your credit card is in the name of your business, you can help to build your business' credit, while avoiding creating problems with your own Many companies offer a list of credit cards that are issued under the business name only.

Those lists typically run $300-$900, depending on the quality of the information inquiring. I would suggest starting your search online via google or yahoo All kinds, and it depends on whether your business is large, small, a startup, or established.It also depends on whether you want to issue debt or equity Debt financing (more common, especially for established businesses): If the business is established with documented profits, products, and customers, then traditional funding sources are common: Bank loans Commercial paper (short term loan) Long term financing can be achieved through bond issuance Equity financing (less common, used more for startups or troubled firms with no other options): Self financing (sink your own money into it) Friends and Family" investors Angel investors Venture capital investors And for publicly held companies, IPOs or additional equity issuance.

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