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e-mail: mlucas@cs.net |
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| RAISING CAPITAL FOR YOUR BUSINESS | ||
| You are ready start your business. How do you get
someone to lend you the money?
- Step one is a solid business plan. This becomes your sales brochure for the dream you want lenders to finance. - Add resumes for yourself and your senior staff. These should describe the wealth of experience your team will bring to the business to guarantee its success. |
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| If lenders
are not interested, even with your home and youngest child as collateral,
don't give up! Uncle Sam through the U.S. Small Business Administration
(SBA) has a program to provide loan guarantees for small businesses.
Your lender certifies to the SBA that it will not grant the loan without a SBA guarantee. The SBA reviews your business plan and other documentation. If they are satisfied, the SBA agrees to guarantee payment to the bank up to 85% of the loan if the business fails. This allows the lender to proceed with the loan. The loan comes from the bank, not the SBA. Uncle Sam simply guarantees the loan. SBA loans are generally at lower interest rates because the bank's risk is reduced. Additionally, the bank must notify the SBA before it can foreclose on the loan. |
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