Where can I find sources of finance for small business startups?

Posted on May 23, 2008
Filed Under Business tutorials |

pictureMany people keep sending e-mails asking this questions… so let us try to discuss it a bit…

Typically, you get funds for your from the following sources:

- Your own savings or resources (bank accounts, stocks, bonds, or even 401Ks)
- Credit cards — an expensive source of capital, but common among small owners because they are easy to get
- Bank loans: only if you have collateral, equity investment, solid experience in the and plan
- SBA loans: same requirement as bank loans, but more paperwork
- SBA Microloans - if you need $30K or lower http://www.sba.gov/services/financialass…
- Grants: only if your falls under Small Innovation Research (SBIR) or Small Transfer (STTR) programs http://www.sba.gov/aboutsba/sbaprograms/… . Check Grants.gov http://www.grants.gov
- Angel investors and venture capitalists - if you need $500K and up and your can post of about $50 million or up in 5 years

I suggest you read the following books to get ideas of how to your :

Financing Your Small http://www.amazon.com/exec/obidos/ASIN/1…
Small Financing: How and Where To Get It http://www.amazon.com/exec/obidos/ASIN/0…
Financing the Small : A Complete Guide to Obtaining Bank Loans and All Other Types of Financing http://www.amazon.com/exec/obidos/ASIN/1…
The SBA Loan Book http://www.amazon.com/exec/obidos/ASIN/1…
Angel Capital : How to Raise Early-Stage Financing http://www.amazon.com/exec/obidos/ASIN/0…
Financing Your Small (Barron’s Library Series) http://www.amazon.com/exec/obidos/ASIN/0…

and don’t forget that no lender or investor will talk to you unless you provide them with a valid plan. Go to http://www.sba.gov , http://www.score.org or http://www.bplan.com for sample plans and instructions on how to write a plan.

Then, go to http://www.score.org/ and in the upper left hand corner, enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a SCORE counselor to your plan and discuss various loan options available to you.

SCORE is a nonprofit association dedicated to education and the formation, growth and success of small nationwide. SCORE is a resource partner with the U.S. Small Administration (SBA).

SCORE has 389 chapters in locations throughout the United States and its territories, with 10,500 volunteers nationwide. Both working and retired executives and owners donate time and expertise as counselors.

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One Response to “Where can I find sources of finance for small business startups?”

  1. Malinka on May 25th, 2008 11:45 am

    Guys,

    this is fine. But what about Europe? Here it’s a completely different stories. It’s easier to take out loans. I am going to launch a startup soon and I am looking for financial support from an investor, but I think banks are much more reliable. At least that’s my experience.

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