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If you’re looking to get started in the small business world, chances are you’ll need some outside capital. Few, if any, small business owners put their startup money out of their own pocket. Fortunately, there are a plethora of avenues available to you to secure some funding to get your small business off the ground. Of course, to get these loans you will need to show a business plan that shows you know what you are doing and that you have a good chance of making a profit within an identifiable time frame.
Neither the banks nor the small business associations nor the outside investors want to give their money. They would like to see a verifiable return on their investment. Of course, no business is a sure thing, but you’ll want to make it seem like yours. Getting a loan is possible if you have a smart business plan, some collateral to put up and a business degree. Here are some of the available outlets for procuring the all-important capital.
First, if you are looking to buy a franchise, you may want to look in a different area than if you are starting your business from scratch. There are franchise financing plans and these are often provided by the franchise company itself. For example, if you want to open a McDonald’s, you’ll want to research the company to see if they offer plans to pay off your franchise loan.
These schemes are often cheaper, better and easier to obtain than loans taken from an external source. If the franchise company you’re buying into doesn’t have such a program, see if your local lending institution offers special loan programs for people who want to start one.
Suffrage. If franchising isn’t your thing, you might want to look into the loans available for starting small businesses. One of the first places you’ll want to look is the Small Business Association, or SBA.
This government program has been specially set up to help young entrepreneurs like you. They offer several different categories of loan programs and you will want to look at each of them and see which one meets your needs. These programs require a certain amount of collateral, although sometimes the small business can be counted on. The Small Business Association does not actually provide the money itself, but will rather recommend you good lending institutions through which you can secure
financing.
Another good place to start for a small business loan is your local bank, meaning the one you do business with. Banks are more apt to give loans to qualified customers who already have an account in good standing. They won’t need to do a lot of credit checking, since they already have most of your financial information at their fingertips. Often, financing through your own bank and interest rates will be better than at other institutions.
Finally, take advantage of venture capitalists and angel investors. These people or foundations are in the business of investment. More than any other option, however, they will be deeply interested in how your business can make them money. If you have a good business plan, then look for these investors for some capital to start your company.
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