These are general points that lenders and investors are interested, we will look at main sources of financing for small businesses.
1. Traditional lenders: banks, credit unions and finance companies were the main source of loans for small businesses. Many of these establishments are small and are in service with experience in treatment of loans to small businesses. Best place to start is the logical institution dealing with your business and personal banking. Should do best to get acquainted with the director and staff of the bank.
So, don’t try to save time at the ATM! Being friendly with Bank staff will not guarantee a loan, but it will be easier for you to make the presentation complete.
2. Sources government Small Business Administration (SBA): SBA work programs with traditional lenders because they are most loan guarantee program to reduce risk by creditors in case of default. Some popular programs include SBA
- 7 (a program) Loan Guarantee: This program helps businesses that have insufficient collateral, which guarantees repayment 75-85%, depending on the size of the loan.
- Low Doc SBA loan program: There is only one way for these loans and approval time is rapid (within 36 hours after SBA receives the application. These loans are for amounts up to 15,000, $ but they can be used to jump-start entrepreneurship.
- SBAExpress Loan Program: This is another program “Credit Guarantee quick procedure, but it covers loans up to guarantee $ 250,000 SBA loan to 50% from the interest rate on this program. May be higher than other SBA programs
- Microfinance: These are loans for amounts ranging from $ 35,000, which are made by nonprofit community-based.
3. Venture capital firms are generally looking for investment opportunities in companies with high profit potential. Usually when you take money from the venture capitalist, this means that we must dispose of some property and investor scrutiny. If you plan to go in this direction, it is imperative to investigate the venture capital firm, and make sure you have good references.
4. Angels: These are investors who are seeking better opportunities in a wide variety of businesses. You are not be a high-tech company to attract these funds. Angel’s smaller amounts to invest venture capital and investment range from $ 100,000 to $ 1 million. There are a number of angel investors in the U.S. and Canada, with groups of at least 170 investment or investor networks distributed in the two countries. You can find angels performing an Internet search, looking for angel organizations in your area. You can ask also your small local library, Chamber of Commerce, the local office of the score and other competitive companies.
As you can see from this brief overview, money for small business is here Prepare your proposal carefully and approach of institutions or individuals that best fit your needs and abilities.