One of the most challenging aspects of starting a small business is financing. A new business requires initial capital for equipment and supplies, advertising, rental of office or warehouse space, and possibly the hiring of employees. In addition, there are certain fees that need to be paid, the amount of which depends upon whether you are forming a partnership, sole proprietorship, limited liability company, or corporation. A Bryan business attorney can help you determine ways to finance your business, but the following provides some ideas.
The most common way businesses are financed is through commercial lenders. You will need to have a good business plan in place, along with projected profits and a business proposal. Unless yours is an existing business, however, you will find it difficult to obtain a bank loan. In such a case, you can work with the Small Business Administration. The SBA provides resources for new businesses, such as loans that have flexible terms, and fairly low, fixed rates of interest.
You may be able to obtain a government grant for your business start-up. Grants differ from loans in that they do not need to be repaid, provided you abide by the conditions. Each grant has its own specific conditions. For instance, a grant may be given to open a small business in an economically depressed neighborhood.
You may be able to obtain financing through a specialized means, such as through a credit union or local organization to which you are a member. If you are a veteran, the U.S. Department of Veteran’s Affairs may be a good option.
One of the basic qualifications for most any loan is that you have a good credit rating and viable plan for repayment. If you are having difficulty obtaining financing from any of the sources mentioned you may consider a personal loan from a friend or relative. Also, you may have assets from which you can borrow, such as equity in your home.
Working with an Attorney
You may find it in your best interests to work with an attorney if you are starting a small business. A Bryan business lawyer can help you find ways of financing your company and provide guidance on the best type of business form for your purposes. Call Peterson Law Group today to arrange a consultation at 979-703-7014 or 936-337-4681.