Finding funding for small business activities can be a daunting task, especially in today's economic climate. But daunting does not equal impossible. Small business owners have a variety of options available to them, and should approach each with the same confidence and enthusiasm with which they designed and/or started their businesses in the first place. But all the confidence and enthusiasm in the world won't help if there's no concrete plan to gain corporate credit. Decide what steps are necessary to find and acquire funding, and then put that plan in writing. It not only clarifies the steps that are needed, but it creates a sense of professionalism for the business owner.
To begin that plan, first determine how much money is needed and how it will be used. Lenders like specifics, so write down all the details.
Second, if the business is already up and running, gather profit and loss statements and other financial documentation such as insurance policies and assets lists that can prove the worth of the business. If just starting out, prepare a specific business plan that includes the owner and/or operator qualifications for running such a business. This might include educational or professional credentials, a resume, or references. Find out the credit score for an existing business or the personal credit score for the new business owner.
Third, create a list of business and personal connections that could assist in acquiring funding for small businesses. Bankers and insurance agents are not the only people who know where the money can be found. Often a business's customers are linked in to providers of credit, and who is a better reference for a small business than an existing customer? And while friends and family members are not usually the wisest source of funds, they can be the best source of references. There may be someone within a business owner's personal sphere of influence who has the necessary connections to loan officers or other sources of funding. Depending on the type of business, there might be professional organizations that could provide information on potential sources of funding. Find a loan broker. These are middle men between business owners and lenders who can often direct a person to available-and likely-resources.
As far as banks go, sometimes the big guys aren't as flexible as smaller banks or even credit unions. Consider a neighborhood bank. The chief loan officer might be a member of the local homeowner's association or a coach of a child's soccer team.
Fourth, consider the types of funding for small businesses that are available. Commercial loans, small business loans, and lines of credit are just a few options to consider. Again, do a little research and make a list of what's available and where. If an existing business has enough assets, a secured loan might be a good idea. If a new business owner has personal assets or property that is no longer wanted, it could be sold to raise initial funding-or to pad a business's bank account, thereby providing more solidity to the business. And more solidity will make a business more attractive to potential lenders.
Finally, hit the bricks-or the phone lines. Start contacting the institutions or individuals who can authorize funding for small businesses. The possibilities aren't endless and success depends on many factors. But being organized and having a plan will open a lot of doors and, ultimately, will lead to success.
Corporate Credit Concepts specializes in Funding for Small Business. For more information about Funding for Small Business and how it might benefit your business, please CLICK HERE for a free phone consultation.