Put to the music of Donald Trump’s TV show, the Apprentice,
the title of this piece provides an emotion that says…there is money to be had.
I recently came across an article on Bankrate.com that addresses the major
sources of money for small businesses.
The article points to Banks as the cheapest source of
funding, as well as the most trustworthy.
It goes on to point out that an entrepreneur needs to be aggressive and
target at least 10 banks to find those that can make the needed loan. A number
of them may make proposals with unacceptable terms. So be sure to check these
carefully. The key to success with banks is to show past profitability and to
have a well defined and documented business plan for the future. It is harder to
get larger sums of funding, so be careful what you ask for.
Another way to get a bank loan is to use the concept of a
government guaranteed loan through the Small Business Administration (SBA). Check
www.sba.gov. They can provide access to banks
that provide loans with SBA guarantees. To make this process work an
entrepreneur should contact the local SBA office for current details. Banks
providing SBA loans generally put more attention on business plans, cash flow
and profit forecasts. The SBA will often make referrals to a SCORE chapter for
counseling and assistance.
There are also funding opportunities via on line providers. One
example is Prosper.com. Usually these sources provide network links between
borrowers and lenders. Most often the interest rates are higher than a bank.
Some of these sites may have up front fees, others may bury the costs in the
rates. If you take this approach be careful not to give away anything you
consider proprietary. Remember these sites are open to anyone.
No matter which source of funding you consider, it can’t
hurt to contact you local SCORE chapter for some free advice and counseling.
Steve Koenig, SCORE Counselor
Visit us at: www.scoresouthflorida.net
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