If you’re looking to break into the small business world, you’ll likely need some outside seed capital. Few, if any, small business owners got their start-up money out of their own pockets. Luckily, there are plenty of ways you can secure some cash to get your small business off the ground. Of course, to get these loans you need to present a business plan that shows you know what you are doing and have a good chance of making a profit within a reasonable time frame.
Neither banks nor the small business association nor external investors simply want to give away their money. They want to see a verifiable return on their investment. Of course, no deal is a sure thing, but you should make it look like it’s yours. If you have a smart business plan, collateral, and a business degree, it should be possible to get a loan. Here are some of the outlets available for sourcing this important asset.
First and foremost, if you’re looking to buy into a franchise, you should be looking in a different field than if you were building your business from scratch. There are franchise financing plans, often provided by the franchise company itself. For example, if you’re looking to open a McDonalds, you should research the company to see if they offer any plans to pay off your franchise loan.
These plans are often cheaper, better, and easier to obtain than borrowing from an outside source. If the franchise business you’re getting into doesn’t have such a program, see if your local lending institutions offer special lending programs for those who want to start one
Franchise. If franchising isn’t your thing, check out the loans available to start small businesses. One of the first places to look is the Small Business Association or SBA.
This government program has been specifically set up to help young entrepreneurs like you. They offer different categories of loan programs and you should look at each of them and see what suits your needs. These programs require a certain amount of collateral, although sometimes the small business itself can be included. The small business association does not provide the money itself, but rather recommends good credit institutions that you can use to secure yourself
Another good starting point for a small business loan is your local bank, which is the one you do business with. Banks are more likely to offer loans to qualified customers with whom they already have a well-established account. They don’t have to do a lot of credit checks as they already have most of your financial information at hand. The financing and interest rates at your house bank are often better than at other institutes.
Finally, take advantage of venture capitalists and angel investors. These people or foundations are active in the investment business. More than any of the other options, however, they will be keenly interested in how your business can monetize them. If you have a good business plan, seek out these investors to get some capital to start your business.