Small Business Financing Isn’t Just About Asking Your Local Bank, You Know
To hundreds of thousands of people in this country in search of their own piece of the American dream, finding a spot for themselves as owners of a small business often seems the most promising way forward. The notion of making it big as an online business is increasingly popular today. But the traditional business way of establishing oneself in a small business – starting a retail shop, a franchise or becoming a service provider of some kind – are alive and well too. Small businesses present entrepreneurs with an easy point of entry into the business world, with only a modest level of risk. Startup businesses like this need less capital, less strategic planning and are much more manageable. As modest as small business financing needs are, for people of modest means, they can still be somewhat challenging.
Your first stop looking for small business financing should be either your local branch of the Small Business Administration or its website. The SBA is a government organization that helps millions of businesses around the country find business financing or find a way to locate the kind of resources they need. At the very least, anyone seriously considering starting a business should check out the SBA website for the wealth of information they have on how small business financing works. You’ll find information on special-purpose loans, grants, SBA loans, 7(a) loan programs and all kinds of other resources. Organizations such as the Business Development Center in your area and the SCORE office can help you by being great source of information too. They can also help you locate investors and venture capitalists.
Businessmen starting small ventures who try to find financing with venture capitalists and other independent investors usually have a great start. They avoid the high interest loans that traditional means of finding small business financing usually involve. Finding venture capitalists and inspiring their interest in your venture is no small matter. You’ll usually need to create a business plan that is convincing enough, and you will need to find mentors and other kinds to helpers who will assist you in finding the right kinds of resources.
Where does one find Angel investors though? Most of these investors operate in networks; and you can tap into those networks on websites like vCapital and Garage. But there are more traditional ways that you could pick, too. A loan you obtain through a local financial institution, guaranteed by the SBA government organization usually comes with a longer loan period than a regular business loan. You would even have to contribute a smaller down payment. You’ll find SBA 7(a) loans at most banks when you go through their small business resource centers. You could also take advantage of the term loans that banks have too – these help you with your needs for working capital or for funding for machinery or other business establishments needs.