<= o:p>
If =
you need
financing to launch your new small business, there are a number of ways to =
get
those needed funds and put your dreams on a secure financial footing. But a
solid, defensible business plan will be the first requirement.
Com=
mercial
banks are the most visible lenders to small business. Your business plan sh=
ould
include specific reasons why the loan is necessary, and a cash flow analysi=
s to
show your ability to repay the loan. The loan officer will also want assura=
nces
that the firm’s management is capable of achieving these goals.
Don=
’t
expect the lending institution to provide all of your capital needs. Your
banker generally wants to see at least 20 percent of your own money up fron=
t as
security to guarantee the loan.
If =
the
chances of obtaining a business loan from a commercial source appear slim, =
you
still have several options. You can use personal assets as collateral for a
personal loan rather than a business loan. If you are truly committed to yo=
ur
business idea, you may consider mortgaging your house. Don’t take this
decision lightly, however. Your family’s welfare will be at risk if t=
he
business fails.
Ano=
ther
option is a U.S. Small Business Administration (SBA) guaranteed loan, avail=
able
through many banks. Keep in mind that the loan application must meet both t=
he
bank’s and SBA’s loan application requirements. On the other ha=
nd,
the SBA can be a little more lenient about factors such as real estate value
and inventory assets in the application process.
If =
you
would like to discuss this topic or business planning, business growth
strategies or a specific business issue, contact SCORE® “Counselors to
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