It is next to impossible for the new business without any prior working history to get funding from conventional lender. Most of the time, banks will often disqualify startups from getting any form of loan at the first place. for the new people it might feel to be not that fair but banks are often conservative organizations. They do not like to take any form of risks with new business ventures for sure.
Well, that does not mean you cannot get funding for the startup sources. In case you have a proven vision to work out well and compelling business plan with the courage and charisma to work on it, you can always find ways to get hands on some funds.
At first, you have to start your work by finding a proven and reputed lender in your said area. The largest form of microfinance program in the USA has to be the Microloan program from Small Business Administration. The SBA is known to work with dozens, if not more, of intermediary lenders across country.
The main aim is to provide some of the microloans to startups and small businesses. You can cover up some more information about this source straight from liberty lending, right at your service. However, most of the lenders might lend in the designated geographical areas only. You can always take look at list of intermediaries by logging online and get some help.
A business plan seems to be a document, telling interested party what you plan on working out with business and how well you are planning to work out on it. Working on a business plan might help you seem to be quite credible and obtain the fund you have been eyeing for.
There is always an art in writing business plan. However, the basic portions of the plan might have some noted points to it.
● At first, it is all about the summary. You will talk about business location, the mission statement, purpose of the said business plan and products that you need to offer. It is mostly associated with the field of funding.
● Now, it is time for the description. It will often include legalized form of business along with the growth, history and longer and shorter term goals.
● You can further enjoy detailed overview of services and products, which will include some new products, which are not yet introduced.
● You better get to the value of market analysis, which will include information on total size of the market, your current market share and how you plan to grow your business.
● Next stop, you need to focus on the overall based marketing strategy as well.
● It must chalk out the financial plan, which will comprise of projections with and even without the fund you are looking for.
There are so many intermediaries, which have some leeway with respect in crafting approval procedure. Once you have come across some lenders serving your area, make sure to give them a call or just visit their websites. Here, you will come to learn more about their requirements for the current loan approval.
● You need to be sure of the business plan you are currently working on. It helps in offering you with a business plan. In case you don't have any, nearly all lenders might help you in creating one. The business based plan will not just help lender understand business goals you are currently dealing with, but can further help in developing realistic expectations for future of startup.
● You need to be sure of the collateral to get hands on the loan you have asked for funding. As most of the microloan borrowers do not have business track records, credit history or income which might support any form of conventional loan, the lenders can ask for assurances that borrower is serious about success of business venture. Collateral can be anything with value, from real estate to cars, equipment to jewelry and more, which you plan to use for buying out the loan.
● There is going to be an alternative source of income as well. Almost all the current lenders might require borrower to just have alternative income source in terms of default.
Even though micro lenders are quite lenient with respect to the current credit scores than that of the conventional lenders, they still have to be 100% sure that borrowers can repay money on time.
Well, the easiest way to work out on that is to appear with the current accounts and let them know that you will not mess the repayment money or tenure at any cost. It might include back taxes. In case you owe any such back tax, you might at least get present on payment plan before trying to get loan.
Micro lenders will always perform their best in considering whole person and fitness for leading proposed business venture. One easy way for them to measure the commitment of borrower is by going through details related to business ownership. One of these details has to be finding out whether borrower has ever requested an Employer Identification Number or EIN straight from IRS.
● EIN is stated to work more like social security number for the business.
● Procuring EIN and having one is pre-requisite for employing some of the workers in the USA legally.
● Any form of serious business owner will have to get hands on the number sooner or later.
● You can easily request for one for your business by logging online IRS government page and following the steps as mentioned over there.
You actually have to prove your worth as a new business with great potential to get the funds approved right on time. Avoid working much for that as the team is all set to address your needs well.
Until next time, Be creative! - Pix'sTory by Isabella Rossellini