If you are looking to get started in the small business world, chances are you will need some outside start up capital. Few, if any, small business owners got their start up money out of their own pocket. Fortunately, there are a plethora of available avenues for you to secure some funds to get your small business off the ground. Of course, to get these loans you will have to show a business plan indicating you know what you are doing and have a good chance of turning a profit within a recognizable time frame.
Neither banks nor the small business association nor outside investors are looking to simply give their money away. They will want to see a verifiable return on their investment. Of course, no business is a sure thing but you will want to make it seem like yours is. If you have a smart business plan, some collateral to put up and a business degree, getting a loan should be possible. Here are some of the available outlets for procuring that all important capital.
First of all, if you are looking to buy into a franchise, you will want to look in a different area than you would if you were starting your business from scratch. There are franchise financing plans and these are often times provided by the franchise company itself. For instance, if you want to open up a McDonalds, you will want to research the company to see if they offer plans for paying off your franchise loan.
These plans are often cheaper, better and easier to procure than loans from an outside source. If the franchise company you are buying into has no such program, see if your local lending institutions offer special loan programs for those looking to start a
franchise. If franchising is not your thing, you will want to look at the available loans to start up small businesses. One of the first places you will want to look is the small business association or SBA.
This government program is specifically set up to help young entrepreneurs such as yourself. They offer several different categories of loan programs and you will want to look at each of them and see what meets your requirements. These programs do require a certain amount of collateral, though sometimes the small business itself can be counted toward this. The small business association does not actually provide the money itself but will rather recommend you to good lending institutions through which you can secure
financing.
Another good place to start for a small business loan is your local bank, meaning the one you do business with. Banks are more apt to offer loans to qualified customers with whom they already have an account in good standing. They will not have to do a lot of credit checking, as they already have most of your financial information at their fingertips. Often, the financing and interest rates through your own bank will be better than you can find at other institutions.
Finally, avail yourself of venture capitalists and angel investors. These people or foundations are in the business of investing. More than any of the other options, however they will be keenly interested in how your business can make them money. If you have a good business plan, seek out these investors for some capital to start your company.
