How to get funding for your small business
The money that a future business owner needs to begin their small business or to keep it running can be available to them in several forms. The important thing is that the business owner-or future business owner-knows how to get that money. This article discusses how a business owner can get funding for their small business.
Getting a loan
Getting funding for a small business from a bank or other lending institution will take a lot of preparation on the part of the small business owner. If the future business owner is planning to get funding for a small business that is not yet up and running, the business owner may need to have a good personal credit history. This takes years to create. Some lenders will take a person's personal credit history into consideration when they are deciding whether or not they want to give them a small business loan.
A business owner will also need a good business plan for their small business when they are asking for a small business loan from a bank. The business plan needs to show the lenders the plan the small business owner has for making their small business a success. Banks will feel more confident lending a small business owner money if they have a plan for how to make more money.
When a business owner is looking for a lending institution to ask for a small business loan, they should do a lot of research to find a bank or lending institution that would be best for them and their small business. This may mean they have to fill out several loan applications and present their business plan to more than one loan officer. But this extra time and energy will be worth it if they get their small business loan.
Friends and family
Luckily for future business owners, getting a loan from a bank or lending institution is not the only way they can get funding for their small business. A small business owner could also get funding for their business from their friends or their family.
To get funding for a small business from friends or family, a small business owner should approach their family and friends very professionally. This business loan should be considered a business investment that the family or friends are choosing to participate in. Numbers, such as how much money was borrowed, if there is an interest rate, and when the money will be paid back in full, should be written down and each person involved in the transaction should get a copy.
The government offers grants for small businesses that meet certain requirements. A small business owner or future small business owner should take time to research and find out if their small business meets the requirements for these grants. If there is a grant that is offered for the small business the business owner should review the requirements that need to be met to get the small business grant. Most of the time a small business owner will need to have a business plan ready to present to get the business grant from the government just as they would a small business loan from a bank.