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Posts Tagged ‘Loan’

Now is actually the best time to start a business. The recession is ending and that means that more banks are willing to lend, although with stringent guidelines. The government is focused on stimulating business endeavors with special funding and tax incentives, and the competition from more established businesses has eased due to bankruptcies and business closings. All you need now is a business loan to get your idea off the ground and running.

Think Like A Business Owner

If you haven’t created a business plan, that’s really your first stop. You might be itching to actually build the business live, but building it on paper first can save you tons of money later. A good business plan will also help you sell your idea to your lender, who will see whether you have a viable business idea or a pie-in-sky fantasy. You will want to figure exactly how much money you need to open the doors, for equipment, office space, and inventory, and for working capital.

Once you have that, start looking for financing. Here are a few places to look:

• Banks – Your bank may actually be lending now. It doesn’t hurt to ask. If you find one that is associated with Small Business Administration (SBA) they can direct you to loans available for people starting their own company. You might have to secure the loan with your home equity or some other asset, but that’s part of taking risks with a business.

• Credit Unions – They offer better terms, but will also want to see your business plan. They will probably want collateral too.

• Small Business Administration – While not an official lender to private individuals, they do supply funds to banks for lending. Thus, you can find out what types of loans and how to qualify. Some might be available for minority or women business owners and by checking with the SBA, you’ll know how and where to get that type of loan.

• Private Investors – Angel investors, friends, and families are also a source of funds when starting a business. You should make these loans formal, and have a written agreement, so there’s no misunderstanding later down the line as to how much you owe and what your repayment terms were. Virginmoneyus.com can help with documenting private lending.