Get Funding for a Startup Business

How to Get Funding for a Startup Business
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How to Get Funding for a Startup Business Its nearly impossible for a brand new business with no prior history to get funding from a conventional lender. In fact most banks disqualify startups from getting loans altogether. It may not seem fair but banks are conservative organizations. They dont like to take the kinds of risks entrepreneurs take. However that doesnt mean you cant get funding for your startup. If you have a vision and a compelling business plan along with charisma and courage you can find ways to get funding. Find a lender in your area. The largest microfinance program in the US is the Small Business Administrations Microloan Program. The SBA works with dozens of intermediary lenders across the country to provide microloans to small businesses startups included but most of the lenders only lend in designated geographical areas.Develop a business plan. A business plan is a document telling any interested party exactly what you plan on doing with the business and how you plan to do it. Writing a business plan will help you seem credible and help you obtain funding. Theres an art to writing a business plan but the basic portions of the plan includeLook at the lenders requirements. The various intermediaries have some leeway with respect to crafting their approval process. Once youve found some lenders servicing your area call them or go to their website and learn about their requirements for loan approval. Some common requirements includeBring your accounts current. Although microlenders are more lenient with respect to credit scores than conventional lenders they still have to make sure borrowers can pay them back and the easiest way to make it appear as though you wont be able to pay them back is to be behind in your current accounts. Get an EIN. Microlenders do their best to consider the whole person and their fitness for leading their proposed business venture. One of the ways they measure a borrowers commitment is by checking up on the details associated with business ownership. One of those details is finding out whether the borrower has requested an Employer Identification Number or EIN from the IRS. Register your business. In the same vein as the EIN you should take steps to register your business. There are pros and cons to the various types of business formats but the worst one is the sole proprietorship which is the default. If your business is organized as a sole proprietorship it means you are personally obligated to satisfy the business liabilities. Start small and manage expectations. You might not be able to get the size loan you want to get so divide your launch plan into phases. Each phase should get the business to a stage where its making more money than its spending. That doesnt mean its making as much money as you want it to be making or that it can support you or your family. All it means is that youve gotten to a level of sustainability.

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