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If you have a great business idea or plan, or you would like to expand your existing business, don’t let a lack of funds stop you in your tracks. There is a wide variety of financing available for small businesses. Let’s take a look at the financing opportunities that small business entrepreneurs can take advantage of.

While the financing sources comprise diverse institutions, such as banks, government sources, venture capitalist and “angel” investors, it is useful to look at what all lenders, regardless of category, want when they loan money or invest in a business enterprise.

When you seek money for an already existing business, lenders will be interested to know about the history of your business; whether it has a track record of good management and good performance. Lenders will be keen to know whether you have the ability to repay a loan and will look at your present cash-flow to see whether it is sufficient to enable you to meet your current obligations as well as to take on extra debt.

Your credit history will also be under scrutiny. A good credit history will help you to get a loan. If you have had problems in the past, it is best to bring these to the attention of the lender yourself and explain how you have turned the situation around.

You can also bolster your chances of getting a loan by putting up collateral. This reduces the risk for the bank in case you default. And finally, if you can show that your own personal money is invested in your enterprise then lenders will have more confidence in the proposition.

Many small business loans are turned down due to poorly presented proposals, inadequate collateral, insufficient cash flow and a lack of management experience.

These are the general points that lenders and investors are interested in, now let’s look at the main sources for small business financing.

1. Traditional Lenders: Banks, credit unions, and finance companies are the main source of loans to small businesses. Many of these institutions have a small-business department and are experienced in handling small-business loans. The most logical place to start is with the institution which handles your business and personal banking. You should do your best to get to know the manager and personnel at the bank. So don’t try to save time at the ATM! Being friendly with the bank staff will not guarantee you a loan but it will make it easier for you to make your loan presentation.

2. Government Sources, the Small Business Administration (SBA): The programs of the SBA work in conjunction with the traditional lenders, as they are mostly loan guarantee programs that reduce the risk to lenders in case of default. Some of the popular SBA programs are as follows

a. The 7(a) loan guarantee program: This program helps businesses which lack sufficient collateral, by providing repayment guarantees ranging from 75-85% depending on the size of the loan.

b. The SBA LowDoc loan program: There is only one form to fill out for these loans and approval time is rapid (within 36 hours from when the SBA receives the applications. These loans are only for amounts up to $15,000 but they can be used for start-up businesses.

c. The SBAExpress loan program: This is another quick-procedure loan guarantee program, but it covers loans up to $250,000. The SBA guarantees 50% of these loans, and interest rates in this program may be higher than in the other SBA programs

d. Microloans: These are loans for amounts up to $35,000 which are made by non-profit community based organizations.

3. Venture Capitalists: These are typically firms that are seeking investment opportunities in companies with a high profit potential. Usually when you take money from a Venture Capitalist firm it means that you have to give up some ownership and control to the investors. If you are thinking of going in this direction, then it is imperative to investigate the VC firm, and make sure that it has good references.

4. Angel Investors: These are individual investors who are looking for good opportunities in a wide variety of businesses. You don’t have to be a high-tech company to attract these funds. Angels have smaller sums to invest than venture capitalists, and their investments range from $100,000 to $1 Million. There are a good number of angel investors in the U.S. and Canada, with at least 170 investment groups or angel networks spread around both countries. You can find the angels by making a search on the Internet, looking for angel associations in your particular area of business. You can also inquire with your local small business librarian, the chamber of commerce, your local SCORE office and with other non-competitive businesses.

As you can see from this brief survey, the money for small businesses is out there. Prepare your proposal carefully, and approach the institutions or individuals that best match your needs and capacity.

Technorati Tags: Business, Finance, Small

Small business plays a vital role in today’s economy. It is now easier than ever to establish a new business. According to the US Small Business Administration, small businesses pay over 45% of the US private payroll. Small businesses also employ over half of all private sector employees and provide 60-80 percent of new jobs over the past 10 years. With about 28.5 million small businesses in the US alone in 2005, virtually all financial institutions now offer small business loans to qualifiers for a percentage. So why apply for a small business credit card?

Keep Track of All Your Small Business Expenses

The first and most obvious reason for a small business credit card is to separate personal finances from business related purchases. With your small business credit card, you can make all your transactions by phone, internet or in person. Then get periodic statements detailing all of your business expenses.

Business credit cards are accepted virtually everywhere that you shop. Covering business purchases with employee’s personal money can get very messy. So instead of relying on cash, use a business credit card. Most credit card issuers offer a credit limit for employee cards as well as different methods to monitor how the card is used.

You no longer have to dread the year-end nightmare of trying to track where and when you spent your money. It’s like having all your book-keeping done automatically for you! In a digital world, why should your business have to collect every last printed receipt?

Establish Your Small Business

A credit card with your business name on it gives your business credibility. A business credit card looks a lot more professional than paying from your own wallet. It also gains the respect of financial institutions. Just by owning a business credit card, your business can build credit. So when you need that business loan, you will get the best interest rate and qualify for higher amounts. As your credit builds you might also qualify for a lower interest business credit card.

So even if your business doesn’t have a 6 figure budget, a business credit card could help your business grow. You never know when your business might suddenly need extra money. Office equipment might need immediate replacement. Without a business credit card, financing could drastically interfere with your daily routine.

Earn Rewards with a Business Credit Card

You can also save money and earn rewards. Certain business credit cards give you cash back on all your purchases. Other cards give you varying cash back percentages depending on where you shop: gas stations, grocery stores, office supply stores, etc. A cash back business credit card is a great way to increase your profit margin.

Other cards give you airline travel rewards just for using your credit card. . For instance, if your company has frequent business plane trips, then small business credit cards that offer travel miles, hotel accommodations or travel insurance are most suitable. This type of credit card could give you travel discounts, free flights, free companion travel or upgraded flight seating.

Not only does a small business credit card provide convenience and rewards, it also helps to build business credit for the future of your company as you watch it grow! Research the business credit cards available and find the card that best suits your business needs. Finance your business for today and tomorrow.

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The idea that there are millions of dollars in grant funds – free money — waiting for the small business owner to tap into them is true and at the same time, not true.

In most cases, grant funds are not designed to start a new business. There are some specialized businesses that may qualify for start-up money, but 99.9% of the businesses in the Yellow Pages would be ineligible to receive start-up funding.

Yet there are millions of dollars available to help fund existing small businesses and employment programs, particularly in the non-profit arena. The trick is to be able to research grants and find those that are most aligned with your company’s mission and/or project.

Grants fall into two categories: government and corporate. They all come with strings attached and very specific requirements for those who will be awarded the funds. Funders look for businesses and organizations that already exist, that will use the money for a worthwhile project, i.e. jobs in inner cities, providing training to specialized groups, etc., and that will develop a self-sustaining program.

For small businesses that are looking for funding for expansion or for equipment purchases, it takes a creative mind to find a grant that could apply to your specific needs while filling the requirements of the grant funders. That is where the services of a professional grant writer are invaluable.

For example, a company may want grant money to fund an expansion of their sales force and they need to add more space as well as hire more people. Well, a for-profit company may not be eligible for any grant money. However, the company could form a non-profit agency that trains veterans or welfare moms in sales skills, leases or buys space to accommodate the workers and gives the new trainees a place to work by leasing them to the for-profit company.

Writing a grant proposal is a very specialized skill, but it can be learned. Grant writing in and of itself is a very lucrative profession. The IRS has established a pay range for grant writers of $50 – $150 per hour. A comprehensive training course is available at http://www.superchargedgrants.com. Students actually work on a real grant proposal while taking the course. Their work is critiqued by a certified professional grant writer

For those who don’t want to do it themselves or who don’t have the time to do it themselves, they can hire a professional grant writer to research and write the grant proposal. An organization will generally pay between $1,000 – $3,000 for a complete grant proposal and even higher for large proposal amounts. There are also grant review services that help grant seekers tweak their proposals for the best possible chance of funding.

Grants for small business funding are out there. The trick is to know how to present your needs in a way that best aligns with the grant funder’s mission. It isn’t easy, but it is definitely attainable and very much worth the effort.

Guide to Getting Small Business Grants

Do You Know that Small Business Grants Can be Waiting for You Almost ‘Round the Corner’?

We are living in the times when governments understand the value of small businesses for the global economy. Small businesses are the pushers and testing grounds for new trends, they provide lots of jobs for the masses, they make any society more stable and happy. So governments have created special funds, programs, associations to provide government grants for small business.

You can be surprised to find out that there are so many types of grants that you can be missing and that can help you out almost instantly – minority small business grants, small business grants for woman, federal grants for small business, business start up grants and even free small business grants. All these types of grants act as a real proof that they really help many small businesses to succeed.

There are two typical issues about getting small business grants.

(1) WHERE to Get Small Business Grants.

Start with doing local search for ‘small business grants’, ‘small business bank loans’, ‘venture funds’ and ‘angel investors’. This will give you a pretty big list of places to apply for help.

If you are in the USA – there are some majors that provide this type of financial assistance – for example, Small Business Administration (SBA) that has many departments that fit all possible types of businesses or help. It can also be wise to check the catalogue of Federal Domestic Assistance – there you can find many good places to apply for the grants.

For businesses outside US there is also a way to succeed. Government, public or private organizations in your country must be giving some help to new small businesses within the framework of these institutions:

- economic development programs, funds, departments, opportunities, initiatives; – banks (usually they have special small business loans and programs); – venture funds, companies, firms; – credit partnerships; – angel investors (this type of business got very popular recently).

The list is big, but it means that you do not need to trust one business grant opportunity. The more opportunities, the better for you!

(2) HOW to Get Small Business Grants.

There is no magic formula to safe getting of grants.

But you can increase your chances using these simple tips.

Build a good business plan. Surely you are starting your business with some plan, but here you need to be very convincing, well-prepared to any questions. People who read this plan must understand and feel that the only element necessary for your success is the money, the grant.

Keep in good contact with your grant agent (manager, officer, anyone who is in charge of all details). Don’t be a pusher, but make sure that you are in control of the situation. A lot will depend upon this person, maybe not the final decision, but a lot. Make sure he/she can reach you at any moment. And would be great if you have his/her contact details, the more, the better.

Try to find someone who already got a grant from the institution or organization you apply to. If it is possible, find out all details before applying there: what problems this person had, what questions asked, what impressed the grant givers, etc.

And the last advice, if in one place it did not work, don’t give up. You can either appeal or try another place.

Only those who knock at the door can see it open.

Technorati Tags: Businesses, Funding, Grant, Small

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It is hard to start a new business and most of the times the budget is much bigger than you had estimated. This is why people who want to put up a new business run out of money quickly and they need to resort to banks in order to finish what they have started. Unfortunately, most banks are quite strict when it comes to giving loans for small businesses.

Traditional lenders have strict rules regarding small business loans and business owners have a hard time when they apply for such a loan to due to the stringent criteria. Nevertheless, there are still banks that have thought about owners of small businesses and that offer great small business loans. If you are interested in making a business loan, you should know that there are many types of loans out there and that you can choose one of them that you find most suitable.

Nevertheless, your business credit rating is a decisive factor for the type of loan you can receive. Thus, if you have bad business credit or even no credit at all, you will have to accept small business loans that have higher interest rates, higher payments and of course a higher rate of denial. Good or excellent business credit on the other hand, will help you get a better offer for an unsecured loan. These business loans can really help your business, if you know how to use them.

Secured small business loans are another option if you don’t manage to obtain an unsecured loan, but they require collateral and only afterwards the business can receive the loan. These loans represent a good choice, since they have good interest rates. However, most secured small business loans must be paid within five years and the repayment period doesn’t vary too much from one lender to another. If you can’t qualify for an unsecured loan and if you have poor business credit, don’t hesitate to apply for a secured loan.

SBA stands for the U.S. Small Business Administration and it was created in 1953, in order to aid, counsel and protect the interest of small business owners. The SBA loan programs were created for all small business owners who are unable to obtain credit by means of normal lenders. If you have not succeeded to get a small business loan from a commercial lender, you are eligible for a SBA loan.

Once you are sure that you are eligible for a SBA loan, you need to figure out which type of loan suits your business needs best. In order to receive help from the SBA, you need to have the following information: a well-prepared business plan, financial statements, a loan request, a collateral and management resumes. Furthermore, every application needs good credit in order to be approved. The applicants who have a high debt, low equity and a poor business plan will most likely be rejected when trying to obtain a SBA loan.

Moreover, SBA applicants are required to have a checklist that contains 14 documents which are necessary for SBA loans. These documents are: application for loan, a statement of personal history, personal financial statement, balance sheet, income and finances projection, certificate of doing business, list of names and addresses of any affiliates, copy of business lease, a short history of the business and its problems, a personal resume, signed business federal income tax returns for previous three years and signed personal federal income tax returns for previous three years.

Small business loans are meant to help people who don’t have the necessary amount of money for their business needs while SBA loans represent the last option for business owners who didn’t obtain a loan anywhere else. This loan is exactly what you need in order to continue or start your small business.

Technorati Tags: Business, Convenient, Loans, Small

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