How to Get Business Funding
You have a great idea. Your new business venture is sure to take off. The only thing that’s stopping you is money. You don’t have enough cash to get your startup off the ground, but there are ways you can finance it and then pay off the loan once your business is booming. If you present your idea effectively, you shouldn’t have any trouble securing business funding.
Write Out Your Business Plan
The first thing you must do is write out a business plan to show your potential financers. People won’t fund your business if you can’t tell them effectively what it’s about. You need to present your business idea and your game plan to turn the idea into a profitable venture.
You must convince potential lenders that your business will be a success. You cannot do this if your business is built on pipe-dreams. Make certain your plan is realistic. If it looks too good to be true on paper, it probably is. Set attainable goals and map out the detailed steps to achieve them.
Prepare Your Financials
Include your financials, e.g. the money you have to invest in your business, the funds needed, and your projected profits over the next three to five years. Discuss in detail your operating costs and returns, as any person willing to put up business funding will want to see your money-making potential.
Decide Upon Your Business Structure
Any potential financer is also going to be interested in your structure, because this will determine all parties responsible for paying back the business funding. If you are a sole-proprietor, you will be the one expected to remit the loan payments. If you are going into a partnership, the financer will hold both parties accountable for paying back any borrowed funds.
Sell Your Business
Not literally. When approaching lenders, you must be prepared to market it. This means you must have your business and operations plan, financials, structure, and goals outlined clearly and in a presentable fashion. If you walk in with an unorganized pile of paper, the funder will already be concerned about your ability to effectively organize and run a business.
Most importantly, keep your options open. Chances are your bank it isn’t going to fund your new business venture, even if you’ve been its customer for years. Traditional banking institutions are no longer interested on taking chances with business startups and “little guys,” this is why many entrepreneurs seeking alternative lending to secure their business funding.