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Business Financing

FINANCING YOUR DREAM:

In today’s world of business there is a plethora of financing options available
for business organizations and entrepreneurs at various growth stages. Experience shows that the longer a business is in existence or the more solid its revenue base the better chances it has to raise additional money at very favorable interest rates.

It is always an uphill task for the average start-up or small business owner to raise money to commence operation or even stay afloat, due to the maze of obstacles they face. Conventional banks are often reluctant to fund start-ups, because, according to the banks, these businesses have no track record. But most entrepreneurs question how they would have a track record without initial funding, so that creates a complex quagmire which results in a high failure rate of small businesses or explains why a lot of good ideas never take off. Click on "Just Do It" for more insight on starting and funding your dream business.

Loan programs from the Small Business Administration (SBA) are designed to address the funding needs of small businesses. Without such initial breaks a lot of successful mid-to-large businesses would never see the light of day.

Of late, local Economic Development Corporations in designated empowerment zones and non-profit micro lending organizations have aggressively been stepping up to the plate to help bridge the funding gap experienced by small businesses.

Statistics show that as proven growth engines, Small and Medium Enterprises created over 75% of all new jobs in America during the last economic expansion of the 1990s, yet success rate is still low as risk factors remain high. SBA loan guarantees are administered through certified lending institutions while Small Business Development Centers (SBDC) around the country help package such deals. The FINANCIAL CALCULATORS could be a useful tool for estimating cashflow and business financing needs.
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FUNDING OPTIONS:

  • Self Funding (Savings and Private Sources) -- Personal Savings, Retirement Account, Home Equity Loan or Cash Loans/Gifts from Friends and Family. Those are the primary sources of money for most start-up businesses. Read "Just Do It" to get an idea of how important self-funding has become.

    These sources are easily accessible than conventional loans, there are less questions and paper work, but it could come with a lot of strings attached. But better be careful before you resort to this option. It helps to tap this source wisely and ensure that the proper documentations are in place to avoid future misunderstanding.

    A private company called Circle Lending has devised a creative approach for structuring business loans amongst family members and friends. Click MyMarketPlace-Online to search for Circle Lending.
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  • Angel Investors -- This option is a growing and vital source of funding for new businesses. It’s typically a scenario where wealthy and successful entreprenuers who have a high tolerance for risk and desire to participate, directly or indirectly, provide seed money to fund a new business in return for a stake in the success or failure of that business.

    According to the Small Business Administration (SBA) there are approximately 700,000 angel investors in the US. A core of about 500,000 of them provide from $25 billion to $50 billion in investment funds per year; nearly 60% of the capital provided is in form of equity, the remaining 40% is a combination of loans and guarantess. Approximately 80% of angel investments are under $500,000

    In recent times angel investor networks have been springing up as clearinghouse where investors and entrepreneurs could meet to share ideas or strike a deal such as Angel Capital Elecronic Network and Angel Capital Association.
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  • Bank Loans -- (Term Loan, Line of Credit, Credit Card) -- This is a conventional form of business financing and it readily comes to mind more often than not when you think of financing your business, unfortunately it doesn't always work ou for most potential borrowers. Stringent underwriting criteria and conditionalities by banks remain a serious impediment for most small business owners.

    Conditions are quite stringent and approval rate is quite low, therefore SBA loan guarantee scheme offered through the banks often enables more small businesses raise money at favorable terms. The major conditions for obtaining a bank loan can be summarized in three Cs – CREDIT, CREDIBILITY and CASH FLOW.

    CREDIT -- Experience shows that borrowers must have an above average credit rating to qualify for a business loan..

    CREDIBILITY -- Borrowers must know what business they are going into and have a good understanding of it and verifiable track record to attract bank loan.

    CASH FLOW -- Any business proposition must be conceptualized in a project/ financial plan and be capable of generating sufficient money to pay off the loan, turn a profit and grow, - the more money, the better, otherwise, no dice.
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  • Private Equity Funding or Public Offering – These sources of financing are accessible to businesses with better performance history or impressive growth prospects, capable of multiplying initital investments 10 times or more in the foreseeable future. This involves selling shares either through private or public offering to individual or institutional investors to raise money for the business.

    Although the practise of taking a company public entails very complex registration, legal and compliance procedures, the end goal of Venture Capital (VC) firms is to take company public through initial public offering (IPO) or sell out to a third party investors.

    A very popular means for raising cash for small businesses is through so-called Small Business Investment Corporation (SBIC) – which are private investment firms seeking lucrative equity investments under the auspices of SBA programs. The opposite end of the spectrum will be to work with major wall street firms to conduct elaborate Initial Public Offering (IPO).

    There are currently a lot of SBIC firms in existence, however, it’s unlikely that a start-up business would be capable of mobilizing funds through this means unless it has a watertight business plan and possess strong growth prospects. However Community Development Financial Institutions or CDFIs are financial institutions that have community development as their primary mission and that develop a range of strategies to address that mission. To reach them click on Community Capital, or for more detailed research on IPO click on FINANCIAL TOOLS.

    You can also explore specific business financing options by clicking on Application Form and submitting at your convenience.
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    MyMarketPlace-Online:

    BUSNESS LOAN & FINANCING:
  • CommercialCapital.info -- Commercial Real Estate Loan, Apply Now.
  • CircleLending.com -- Successful Financial Transactions, Click Here
  • CitiFinancial -- Apply today and you could get your check tomorrow!
  • BusinessCashAdvance.com -- Get Cash Advance Now
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    CREDIT CARD PROVIDERS:
  • American Express -- Express Approval®- Get Blue from American Express.
  • Discover Gold Card -- Click Here Now
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  • Chase Platinum Card -- 1% rebate on All other purchases, Click Here.
  • Adventa Business Card -- Up to $50,000 Credt Line, Apply Now.
  • Hip Cash Card -- Click Here To Apply Now.
  • Fifth Third Bank Card -- Get 0% intro APR, then 7,99%!
  • Acclaim Card -- Stop Losing Your Money, Click Here!
  • CreditAxis.com -- Bad Credit Loans. Bankruptcy OK! Click Here!

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