Tips on Financing and Financing Sources From a Rockin’ 7 Figure Business Builder
Let’s talk about business acceleration and how to obtain financing for your own mighty venture. I’ve written about getting investors to put money into your business, but if your company is on the smaller side with fewer (initial) lofty goals and a more organic growth curve, a loan can be a good financing method. Loans come in three tasty flavors: –Secured Small Business Administration (SBA) SBA loans are easier to get if you have assets to secure the loan with, a solid pre-existing banking relationship, and a high tolerance for bureaucracy. The process can be excruciatingly slow, but if you make it through, you can get a six-digit loan on pretty favorable terms. A small business bank loan also requires a pre-existing banking relationship and high tolerance for bureaucracy, but you’ll get okay-to-pricey terms based on your credit rating. An unsecured loan requires no collateral (a home or other asset) to secure it. You can Google sources of unsecured loans, but always be sure to check out their credentials. If you demonstrate good will with prompt payments, you’ll be eligible for another, often larger, loan in time. Now, the first secret about succeeding in the financing process… Raise money BEFORE you need it, because the financing process always takes longer than anticipated. For institutional investors a realistic expectation is three to six months from the first meeting to the wire-transferred funds. Financings sometimes occur in far less time, but you must be prepared for the long haul. Start raising money six to nine months before you’re due to run out of cash. Have a strong banking relationship already established in the event that you need a bridge loan to tide you over during an extended financing process. This week, think about whether a loan is best for your business or if finding investors would be more to your advantage. Begin to outline a business plan that centers around your choice. To your successful funding and rockin’ business acceleration! Christine Comaford Christine Comaford, The 7 Figure Business Builder |
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