Where to Look for Business Financing

Starting a new business can be difficult... in addition to creating a business plan that will outline what your business intent is and finding the contacts and locations that you'll need, finding the money that is needed to get a business off of the ground can sometimes seem impossible. If you're not exactly sure how to get the money that you need, you'll find several suggestions below. >From information about traditional bank loans to finding investors, you're sure to find something that helps you to get on the right track toward the money that you need. Bank Loans The first stop for many potential business owners is their local bank. Many banks offer loans for startup businesses, though the process for applying for a business loan from a bank tends to be a bit more in-depth... after all, they want to make sure that your business plan is solid and that they'll get their money back whether your business succeeds or not. In most cases, it is easier for a person to get a personal loan with the intention of using the money to cover startup expenses than it is to get a business loan for a venture that isn't guaranteed to succeed. Loans from Alternative Lenders Alternative lenders such as finance companies and online lenders can provide money for new businesses at competitive interest rates to banks, but also tend to have some of the same apprehensions about lending money to an untested venture as many banks do. Once again, personal loans are often better than business loans, though there are some lenders that may specialize in providing startup capital for businesses. Taking the time to investigate all of your options is the best way to determine which type of loan you should apply for. Business Organizations There are a variety of business and small business organizations that exist for the sole purpose of helping individuals get the money that they need to start a new business. Often these groups won't lend the money that is needed directly (though some do), but instead will act as somewhat of a cosigner in guaranteeing the loan to the bank or other lender that issues it. With the support of one of these organizations, lenders are often much more likely to grant a business loan... even if the business goes under, they are guaranteed that they will be repaid. Government Grants In some cases, government grants are also available to help you get your business off of the ground. These grants usually require that you meet certain criteria and fill out applications, but should you qualify for the grant assistance you'll receive the money that you need for your business without having to pay it back. Needless to say, not everyone who applies for a grant will receive one, but if you can find one for which you qualify it's certainly not going to hurt you to try. Investors One other alternative method of getting the money that you need to start a business is to find investors to contribute to the startup funds. In return for their investment, investors are usually either granted a limited partnership in the business, or are simply considered to be shareholders and as such are granted a portion of the profits from the business, depending upon how many shares they own. You should carefully work out how you plan on dividing profits and protecting the rights of investors before approaching potential investors, however... if you don't, some investors may abuse the rights granted to them and try to control how you do business. You may freely reprint this article provided the following author's biography (including the live URL link) remains intact: