Posted on July 19, 2015 in Career Grants
Entrepreneurs usually have great ideas and powerful ways of implementing them, but what they sometimes lack is the money. Borrowing the money is always an option, but it has to be paid back with interest. It can also be challenging to get a loan depending on the type of business the entrepreneur wants to open.
Things You Should Know About Business Loans
Getting a small business loan isn't an easy, overnight thing. There is a lot of preparation on your part that must be done. Before you even walk into a bank to talk to someone about a loan, you should have a solid business plan put together that includes budgets, market research, and projections. If you're not familiar with these items, then you should spend time researching and planning before attempting to get a loan.
Once you've created your business plan, you can meet with a banker to find out the specifics of the loan. Each lender requires different things, but in general, you can expect them to go through your financial records with a fine-tooth comb. They may ask for bank statements, tax returns, and copies of checks. In addition, depending on the risk involved with your business, the bank may ask for equity injection – that means money you're willing to put into the venture independent of the loan. If it's a risky business, like a restaurant or a bar, the bank may require a significant amount of equity from you before they will even consider the loan. Sometimes, getting a loan means you need money first, which is a paradox, and a must frustrating one for entrepreneurs with a dream.
Another Way…Business Grants
Even though business loans can be a hassle, if you've been turned down, then there might be another way. Business grants, like all other grants, are a sum of money offered by an organization for a specific purpose, but these funds don't have to be paid back. The requirements to qualify for a business grant varies, but in general, the business must contribute to society in some way, and for smaller community grants, it must impact the community specifically.
Although the process of getting approved for a grant can be difficult, that doesn't mean you shouldn't consider them. Federal, state, and local governments offer a wide variety of grants to help small businesses start and develop their operations.
Best Source for Business Grants
One of the best places to start when you are in the market for a business grant is sba.gov. The website hosts plenty of resources for small business owners to help them through all the stages of their business model, and it also has a tool to help them find financing options, which include low-interest loans, venture capital, and scientific and economic grants, so no matter what you're looking for, you can find it through this website. However, the "Loans and Grants Tool" will walk you through a series of questions to narrow down the best grants available for your business type. It's a great, no-hassle way to find the financing you need to get your business off the ground.