Small Business Financing
Financing a small business
Starting a small business isn't easy, and the upfront costs can often total more than the cost of running the business day to day. If the business owner does not have the extra capital, they can apply for small business financing through their local bank, credit union or lender. Financing a small business can be tough, especially if the bank denies the owner based on low or no credit. In this case, the business owner may want to access their local SBA for help with loans.
When financing small businesses, a good credit history is needed. Business owners with good personal credit history have a much better chance of accessing a small business loan or credit card. If you don't have good credit history, look into government grants or other available programs to help you gather startup capital. One of the worst things a business owner can do is use their own money to finance a startup business, especially if he or she is not in good financial standing. Ruining your personal credit history in the event your business goes down is not a sound financial move.
Small Business Startup Financing
If you are just starting a small business, you will need small business startup financing. This may be offered through programs in your local SBA branch or through the government. Often, grants are provided to certain types of small businesses, in order to help with small business equipment financing or overhead costs. If you're going to your bank, bring evidence of good personal credit history. Mortgage statements, credit card statements and other proof of your good standing will help the bank decide what sort of loan they will give and how much money your business should get.
Often, businesses need financing for other costs, such as secretarial work, rent for the premises, products or small business accounting. Small business incubation programs help businesses achieve these things by offering a reduced rate or even free services. Before choosing a loan, ensure that you speak to a financial professional to determine the risks. This will help you avoid running into financial trouble later.