How to Get Startup Business Capital
- 1). Draft a business plan. As was mentioned in the introduction, no capital provider will even listen to an entrepreneur without a good business plan. Your business plan should detail your vision for the company's growth, the products or services offered, your marketing plan and some pro-forma financial statements for your company. SCORE offers entrepreneurs business planning assistance and has some templates available on its website to aid you in writing your plan.
- 2). Apply for loans. The first step in seeking capital should always be securing debt financing. Community banks are often most likely to lend to entrepreneurs, while larger national banks tend to eschew small business loans. Regardless of what lenders you speak to, be sure they can offer SBA financing, since startups are more likely to get SBA funding than traditional bank financing.
- 3). If you can't secure a business loan, consider taking on partners. Local entrepreneurs or friends and family can be good sources of startup capital. Often these sources will look to be equity partners in the business, rather than merely creditors.
- 4). If all else fails, consider "bootstrapping." Bootstrapping means cutting every possible corner and using minimal funding for your business. This approach is very risky but many profitable global enterprises (like Apple and Microsoft) started out as bootstrapped, garage-based projects.
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