| Oct. 21 2007 at 12:37 AM |
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This is an extremely interesting article jam packed with information I was very disillusioned about.
I am especially interested in the Small Business Investment Company (SBIC) types that were highlighted in this article. This type of company sounds like an excellent resource to try, based on your article.
However, I can't help wondering if these SBICs are using the same process to decide on whether or not a start up venture is too risky.
I have yet to have found a lending institution that is convinced by my business plan. I however fail to see the complications for understanding it. It is understood that these figures are projected, right?
My situation is that I would like to change my home-based business, because I have outgrown the space.
Right now, I need to locate a physical/commercial location for my business and acquire the proper equipment and safety gear, to conduct my classes.
My problem gets more complicated because I have no cash to pursue my business venture.
What I am looking for is a small business start up loan, preferably an unsecured business loan, and most banks expect you to present them with these figures.
I believe I have been having problems getting a loan, because I don’t have enough collateral.
However, in order for my business' bottom line to improve, I need to be able to acquire the space so that the expansion can occur and hence allow my business’ income to grow. I even projected that my projected income will allow me to cover the loan payment to the lending institution.
In reality, I find that convincing banks or lending institutions, in spite if my projected income, is next to impossible. It's almost as if they don't believe in making dreams a reality any more.
How much different are the SBICs, when it comes to what is considered appropriate for an approved start up fund, to regular banks and lending institutions?
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| Oct. 21 2007 at 12:42 PM |
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roblue,
Banks aren't in the business of making dreams into a reality - they are in the business of lending other peoples money (their depositors) so they can pay interest to those depositors and make a profit for their investors. The "spread" is pretty small - so they can not afford very many losses by loan default. Therefore they look to minimize their risk.
There are at least 50 different ways to bring capital into a business. Those that supply the capital expect a return that is commensurate with the risk - both actual and perceived. Your opportunity (challenge) as the entrepreneur is to demonstrate that your situation fits that requirement.
While the plan and numbers are a vital part of that "demonstration" they aren't everything. 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
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| Oct. 26 2007 at 7:39 PM |
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robertj wrote: roblue,
Banks aren't in the business of making dreams into a reality - they are in the business of lending other peoples money (their depositors) so they can pay interest to those depositors and make a profit for their investors. The "spread" is pretty small - so they can not afford very many losses by loan default. Therefore they look to minimize their risk.
There are at least 50 different ways to bring capital into a business. Those that supply the capital expect a return that is commensurate with the risk - both actual and perceived. Your opportunity (challenge) as the entrepreneur is to demonstrate that your situation fits that requirement.
While the plan and numbers are a vital part of that "demonstration" they aren't everything.
Thank you for your realistic perspective in your response. I know all too well how true your post actually is.
However, I have been doing some research, and I still am.
I am committed to my objective.
I will keep you posted on my status.
Thanks for taking the time to respond to my post.
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| Oct. 26 2007 at 7:43 PM |
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Nope! To be honest, the thought never crossed my mind. I didn't believe the Government actually gives out grants without an extremely complicated process. Hence, I never looked into the government grant as a viable source for me.
However, I do thank you for the suggested article linked in your post. All the information I can gather is exactly what I want.
Thanks again.
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| Nov. 01 2007 at 3:59 PM |
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Google for angel investors. You will have to put up something as collateral, or give up a huge stake in your business. Unless your idea is time constrained, ie only has a shelf life of a few months, work, save some money and then do what you need to do.
If you have a space issue, look for someone who can drop ship your product. Avoid expensive and potentially crippling space leases at start up.
Brainstorm other ways you can get the space you need. Do you have a friend who will rent you space in their garage if yours is full? Also look at Public Storage type spaces for storing inventory. No leases but you darn well better pay your rent or they sell your stuff.
As far as the lending institutions, take a hard look at your business plan. Something is amiss if more than one has said no. Did you have an accountant do your projections or did you? Do you have any business history? Most banks would not loan Donald Trump money on paper. Work on your business connections. Private lenders are also available, they are usually bruisingly expensive though.
Also make sure you have a confidentiality agreement (NOLO.com) before you start showing a good business idea around. Good luck.
BTW unless someone can prove me wrong, government business grants are an urban legend. However our country might be whole lot better off if the gov't did plow some money into small business. After all, who is going to employ all of us who are holding up social security? And pay the National Debt? And taxes....and on and on
Dale
www.ourbestidea.com
www.maskerinsurance.com
www.maskercreations.net
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| Nov. 04 2007 at 9:20 AM |
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daleyfla99 wrote:
Google for angel investors. You will have to put up something as collateral, or give up a huge stake in your business. Unless your idea is time constrained, ie only has a shelf life of a few months, work, save some money and then do what you need to do.
If you have a space issue, look for someone who can drop ship your product. Avoid expensive and potentially crippling space leases at start up.
Brainstorm other ways you can get the space you need. Do you have a friend who will rent you space in their garage if yours is full? Also look at Public Storage type spaces for storing inventory. No leases but you darn well better pay your rent or they sell your stuff.
As far as the lending institutions, take a hard look at your business plan. Something is amiss if more than one has said no. Did you have an accountant do your projections or did you? Do you have any business history? Most banks would not loan Donald Trump money on paper. Work on your business connections. Private lenders are also available, they are usually bruisingly expensive though.
Also make sure you have a confidentiality agreement (NOLO.com) before you start showing a good business idea around. Good luck.
BTW unless someone can prove me wrong, government business grants are an urban legend. However our country might be whole lot better off if the gov't did plow some money into small business. After all, who is going to employ all of us who are holding up social security? And pay the National Debt? And taxes....and on and on
Thanks for the luck.
Your statement about Government grants being an urban legend...I couldn't have said it better myself.
However, I have gotten some excellent suggestions and resources in this community.
I have to say that as far as angel investors are concerned they too appear to be more of an urban legend.
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| Nov. 05 2007 at 12:06 PM |
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roblue,
The federal government provides grants through their STTR and SBIR programs. However, they are not for the purpose of "starting a business". Most of their start up funds are loans which they support with "guarantees" (like the SBA program).
There are micro loan programs which provide small $ amounts to support "lifestyle" entrepreneurs.
There are private sources of grant funding - but they usually have a specific "purpose" or goal for their dollars.
There are angel groups in the US who collectively have thousands of members (with some duplicates) and we estimate that the community of "private investors" numbers in the tens of thousands.
Having an optimum capital strategy is one key to success and developing one begins with "how much capital are you seeking"? 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
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| Nov. 05 2007 at 4:10 PM |
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We all know there are around four thousand companies that are trying to scam us, and that for the most part official (ie: not tertiary) research is the way to go. The site listed below was alright. They did what they said they would do, and gave me the tips below on how to pick out a scam. (It seems like common sense, but I was scammed once, so it can't hurt)
http://www.grantability.com :
1. Be wary if someone promises you a grant. No third party is is a position to
promise an individual a grant of a specific amount. Only the government or
foundation who has the money can promise or issue it.
2. Grants are generally given for business start-ups, home purchase, and education.
There are other programs of course, but personal grants and grants for debt
relief are rare enough that I have never heard of one. If a company promises
you a grant to get out of debt or to pay off credit cards, watch out for them. The
best debt option is usually consolidation or refinancing.
3. This one is tricky, but before agreeing to anything, call every number they
have provided you with. If the customer service number is different from the
sales number, and there is another one for refunds, be wary and call to
confirm.
4. How are they asking for payment? Do they accept credit cards, cheques, money
orders? Credit cards are one of the easiest ways to pay, and also the easiest
to trace. If they do not accept them, there may be a negative reason.
5. If a company says they are affiliated with another company, call both and
check the stories out.
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