Forums: Discussions for entrepreneurs and small business.

I`m here debating with my partner, whether we need to form a company first or get the funding first?
What if our company doesn`t get the fund in the future? then what will happen next to the company? And what about our tax status?

It is possible to "line up" the funding before forming your business entity. It is not usually well received by the investment community - but it is possible.

However, without an entity - you can only receive funds in the form of a personal loan.

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

That`s absolutely true; no business vehicle, no funding except by way of personal loans. You could however, begin to line up investors prior to establishing the entity but investors usually require a personal guarantee too. Sort of a catch-22 scenario.

Many debt sources (like the SBA) require personal guarantees on loans to startups. However, it`s less likely for that to be part of an equity raise.

We believe the key is to have the "optimum" capital strategy for you and your business.

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com

Robert,
Does SBA approve loans on a well written busniess plan or the personal guarantee is the only choice?

biznessman,

A well thought out business plan is an important ingredient in securing an SBA loan.

 

In general, loans are granted based upon the ability to repay and assets available. It’s quite common for an SBA guaranteed loan to require “personal guarantees” from each of the owners.

 

-------------------------

Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
info@bizgrowthmasters.com