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Funding a Startup
How Entrepreneurs Qualify for Funding from Banks
A common question I get is “How do I get a bank loan to fund my startup?” The default answer is that it probably won’t happen, because most banks just don’t make bank loans to startups. The failure rate is just too high, and startups typically don’t have the assets or revenue stream to back up the loan. That’s why Angel investors are so sought after by entrepreneurs.
The Danger of Being Undercapitalized
It’s always exciting to think about the idea of having your own new start up. You hear about stories where entrepreneurs started with just $300 and a cardboard box and then turned their business into millions. In reality, having worked with many types of business owners, the first mistake made by most is simply not having enough capital or access to capital while growing your business.
How Much Money Do You Need to Start Your Business?
Knowing how much money you need to start your business requires careful planning. Costs should be broken down into startup expenses and operating expenses, and you should put together your best, most accurate estimate of all your expenses in the first year.
Documentation Required When Applying for a Business Loan
Finding and applying for business funding requires patience, time, and a lot of documentation. Depending on your financial situation, the amount of paperwork you need will vary. It will also depend on whether you are getting a conventional loan or an SBA loan.
Getting Help from SBA Programs
The Small Business Administration fills a number of different roles for small business, with a wide range of programs for entrepreneurs. These include financing help, training opportunities, help obtaining government contracts, and general small business advocacy.
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