No one ever said that obtaining financing for your new business would be easy. However, you stand a much greater likelihood of approval if you follow the four steps outlined below.
Prepare a Business Plan
A business plan is similar to a roadmap in that it shows the future direction of your business. To convince bankers or investors to provide you with start-up funds, it’s important to make your business plan as thorough as possible. It should contain a description of the company, analysis of the market you’re entering, an organization and management chart, information about your closest competitors, your marketing plan, and details about the products or services you intend to sell. You can learn more about preparing your first business plan by viewing the resources at the Small Business Administration website.
Include a Funding Request in Your Business Plan if Needed
If you expect to apply for outside funding, be sure to include a section in your business plan that includes this information. It should list how much start-up capital you need, how you plan to spend it over the next few years, and the type of financing you prefer to receive. If you already have plans to sell the business, include them in this section too.
Financial Projections for Your New Business
This section is for hard data, not the financial goals you hope your business reaches during its first few years of operation. Lenders and investors look at this section to gain a better understanding of how your company intends to spend the money to pursue business growth. You should complete your market analysis before attempting to create a financial projections section. Including historical financial data for established businesses can reduce the total approval time.
Small Business Administration Loans and Other Financing
Loans you obtain through the SBA may have a lower interest rate and more generous repayment terms than bank or credit union loans. However, you may not qualify for this financing as a new small business or if you have had recent credit issues. Norris Commercial Capital invites you to contact us to learn more about alternative business financing options today.