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Where to get funds to grow your business
Of course you can head for the immediate solution that comes to mind: your local bank.However, there are a number of different types of financing solutions that you can turn to in order to finance your business.There are also a different number of banks that you can look at, along with different types of business loans and financing arrangements. Here are the most common and the less common resources and options for financing your business:
Here's some information on a few of those financing options. The federal government The federal government's Small Business Administration offers a great resource to help the small business owner plan business budgeting and financing options.You can also look on their website at www.sba.gov for information on government grant financing options.While the government does not provide grants solely for setting up your business or making it larger, it does provide grants to any businesses or organization that works to help small businesses with management, financing, technical assistance, or other business aid.Usually these organizations are non-profit organizations. If you don't qualify for a government grant, the Small Business Administration also functions as a lender and will back up your business loans.The Small Business Administration will either function as the lender itself or it will guarantee your loan through another lender in order to limit the risk for the lender. Personal financing When it comes to your own business, personal financing is a way to finance that many people don't believe that they have the resources to do.However, that is not necessarily true.You can finance your own business either through assets that you already have, a savings account that has been waiting for just this time, or by going into personal debt. Many people finance their business initially through the use of credit cards.Then you can apply your house's equity, along with your retirement account, and your insurance policies.Aren't prepared to go quite this far?Sit down and determine exactly how much risk you are willing to take on.Think seriously about your financial and familial situation.How much other responsibility do you have? Friends and family financing Many entrepreneurs find that their friends and their family are willing to help them out with financing a business venture.This might be an avenue for you to pursue. Commercial financing Commercial financing refers to any commercial organization that provides financing for your organization.This can be a traditional lending organization, such as a bank or a credit union.Or it can refer to a commercial lender like GE commercial financing.Here are some tips that can help you know what you need to do when you approach a commercial financer for help with your small business financing: No matter which approach you decide to take to financing your business, you need to start with an actual financial plan.The SBA offers templates and directions on their website to help you come up with an idea of what your finances are and what they need to be. You will need to collect the following information to adequately understand where you are, where you want to be, and what you need to get there.
The strength of your financial statements will help determine what kind of loan you will qualify for and the terms of that loan.You need to have a concrete plan in place before you seek funding from any source, whether it is commercial or if it is a governmental source.Come up with a precise plan for marketing your product, come up with financial statements, and be as precise as possible.All commercial lenders will require this information, and it will help you out also as you understand how your business is going to work and what you can expect in terms of investment and profit. You also will want to consider forming strategic partnerships with other people who can bring both collateral and business smarts to your enterprise.Also look for niches that you can fill in particular industries, so that you won't have as much competition.
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