Preparing for Financing
Before an entrepreneur or business owner approaches a lender or investor for financing they should make sure that they are ready to do so. Whether you’re looking for start-up capital or funds to keep your business operating, it’s important to understand what lenders & investors are looking for. In addition, business owners should have a good grasp of their financial condition at all times and be able to clearly articulate the details of their business including their financial condition, realistic projections, and financing needs. In addition to on-line tools, Charlotte has resources that can meet with you one-on-one to help you assess your readiness and increase your likelihood of succeeding.
Local Resources to Help you Assess Your Readiness for a Business Loan
SCORE, counselors to America’s small businesses and a resource partner with the U.S. Small Business Administration (SBA), is a nonprofit association dedicated to entrepreneurial education and the formation, growth and success of small businesses nationwide. SCORE provides free and confidential small business advice for entrepreneurs and small businesses, with more than 60 local volunteers providing face-to-face business mentoring.
The Institute for Entrepreneurship provides one-on-one business counseling services to small business owners (sign-up online). They also offer courses and seminars on, among other things, using QuickBooks, a great tool to help you begin to understand and manage your business finances, as well as how to find funding for your start-up business.
Best for late-stage start-ups (those with an existing business plan and that are ready to “launch” their business) and existing businesses, the SBTDC helps small business owners meet the challenges of today’s business environment, manage their ever-changing world, and plan for the future of their business. The SBTDC provides management counseling and educational services to small and mid-sized businesses with a primary focus on management counseling issues such as financing, marketing, human resources, operations, and business planning and feasibility assess.
HELPFUL HINTS FOR STARTUP FINANCING
Are there grants to start your business? In a word, no. Most start-up businesses do not qualify for grants. But with careful planning you may be able to qualify for other types of funding programs. Here’s how:
Have a good business plan with realistic financial projections;
Wisely estimate your startup costs;
Make sure you know what lenders are looking for;
Don’t be surprised; know what’s on your credit report by reviewing it once a year;
Learn how local programs can help your bank turn their response to your loan request from a “maybe” to a “yes”;
Explore alternative financing options; and
Take advantage of local resources that can help you be better prepared!
And if you’re still wondering about grant programs, learn the truth about government grants.
The SBTDC has created an on-line training module that describes potential funding options (including family & friends, angel investors, loans, specialized grants, local sources), and what the various financing sources look for from the individuals / businesses they fund. Although you do have to register to view the module, it is free and well worth the time it takes to register.
Learn what banks will evaluate when they consider your application.
Before you seek financial assistance, you should thoroughly assess your current financial situation. The SBA has put together a resource to help.
Lenders will look at everything from your personal credit history – to your business systems and processes – and more – as they consider your business loan request. This tool will help you understand what banks will be looking for.
Well organized, easy-to-read and informative, this downloadable workbook from SCORE provides the basics of what small businesses need to know when it comes to their financial management.
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