Financing Your New Business

If you are starting a business but need some financial support to start or develop your business activities, then this article is for you. We will take you through the many options of raising finance and provide you with a list of the upsides and downsides to each option to that you can make the best decision for you and your business.
By []Simon P Misiewicz

Open a new business account today.

At this time you should know what your costs are but if you would like to put your costs into a user friendly cash flow / profit & loss template.

What are my options?

The following options are available to you.

Bank Overdraft:

A bank overdraft provides customers with a short term financial support but will be regularly reviewed by a bank manager and may need to be paid back within a short time scale.

Upsides

-Short term financial support to get started
-Getting money from the bank in this fashion is relatively fast

Downsides

-Can be expensive with high interest charges
-Banks may require personal guarantees
-Interest rates may be variable so can fluctuate over time

Bank Loans:

Bank loans are longer term financial support and can have a fixed rate of interest so you know what you need to pay back. This is particularly useful for one off events such as setting up a business, making a new product etc

Upsides

-Borrowing is for a longer period of time
-The rate of interest can be fixed and you can forecast your repayments
-Once paid back you still have full control & ownership over the business

Downsides

-Can be expensive due to the levels of interest
-Certain banks may wish to spend time with you to understand the business and request financial reports pulling you away from your customers.
-Banks may require personal guarantees
-Repayments are not usually flexible and will require you to pay a fixed amount of the agreed term
-Loans may be secured against assets of the company and you could lose assets if loans are not repaid

Creation of shares:

If you have a limited company you could sell part of the company to people that may be interested in investing in the business and take a share of the profits.

Upsides

-If you wanted to have a limited company then you could sell shares to someone in exchange for money
-People investing into your business may also provide some management support in developing the business

Downsides

-Understanding the value of shares is subjective and disputes can arise
-Decision making may become less flexible if the shareholder wishes to get involved in the business.
-There may be conflict of interest between you and the shareholder as to what to do with the business as certain intervals, especially if someone makes an offer for the business.

Friends & Family:

Family and friends that you have a good relationship may also wish to support you and your activities and lend you money.

Upsides

-There may not be such rigid ties to the administration of the borrowing compared to bank and investors
-The arrangement of money may be quicker than other borrowing options.
-Invariably the cost of borrowing will be cheaper than other arrangements

Downsides

-Unless agreed at the start the amount of interest or the time to repay the debt may be disputed
-Debts between friends and family can affect relationships especially in troubled times
-The length and valuing of borrowing may not be stable as it depends on their circumstances not just yours

Investors:

People may wish to invest in start-up companies in return for a share of the business

Upsides

-Investors may provide some support to you in the running of the business
-Investors may take more risk and invest more into the business compared to banks

Downsides

-Investors may take some time to reach decisions about your business
-The cost of investors may be considerable if not by way of interest returns but by way of their ownership in the business
-Your decision making process may be slower if they need to be approved by the investors

Simon Misiewicz

Director [http://www.optimise-gb.com]

0115 946 1991 [http://www.optimise-gb.com]

Article Source: [http://EzineArticles.com/?Financing-Your-New-Business&id=6738283] Financing Your New Business--> _______________________________________________________ Every year, the government--local, state, and federal--gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up business grants, sources, how best to fill out applications, grant management step by step tips, setting up a business steps at his website Grants to Start a Business
L. Edward helps people to start a business, get grant money, build, market online at Home Business Management
Learn where to find money for funding starting a business, grant sources, grant programs. Our onsite free information will walk you through step by step setting up a business as research required , business types, business plan, start up costs, business license, taxes, funding. Grant Programs and sources include Government Grant Money as Federal grants, State grants , Local grants, Federal assistance, grants.gov and Development Offices. Learn the Business Grants Step Management and 'know how' to spend your time, proposed business clarity, know your business needs, know how to avoid scams. Learn online step by step How To Write A Grant Application including how to write a business proposal, the summary, grant justification, project description, budge, qualification proof, outsourcing if needed.
Get A Free Legitimate Home Based Business Report , Internet Business Ideas and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leons Home Business Website Internet Home Business Leon Edward Helps people to start, grow legitimate Internet Based home business income with business structure, small business legal service information, step by step guides and online business training articles, reviews, marketing blog and newsletter... with legitimate business ideas and opportunities as top BBB rated home businesses, turnkey internet business, a 3 steps to internet income business proven mlms, even a start free work at home program Also for self Improvement visit Personal Development Training and Brain Training Software

Funding Strategies For New Business Owners

Are you looking for funding strategies for your new business? It can be very difficult when you're starting out to find the money you need. Luckily there is a process that you can go through to make yourself more prepared for the next time you ask for a loan. With these steps you can increase your chances of getting a larger loan and not being turned down by a bank or investor.
By []Patrick Gage

Banks used to give startup loans to business owners based on factors like their personal credit, experience, and business plans. All too often, small businesses go under and banks loose most of the money they loaned. This is why they instated new rules that determine who can get loans. Now they have rules in place that make it impossible for business owners to obtain loans unless they have business credit, or lay down some sort of personal guarantee.

To help you get accepted for a bank loan you will have to obtain some sort of business credit. You can either get a business credit card or start making payments to a company that reports to business credit companies. It takes some time to build up credit, but it will help you in the end. Anyone can obtain a business credit card that lends about $1,000 dollars, but never give your social security number or use your personal credit to get one. If you go the other route, just make sure that the company reports on time payments, and remember to always pay before the bill is due.

While you wait for your business credit to build up, start making your business plans. You probably have a general idea of how you want your company to run, but you need to cover every aspect of your business before you go to a bank. Preparedness is a major part of funding strategies as it shows you are eager and ready to work. Decide on the layout of the building, employee schedules, sale prices, merchandise, and how you expect to grow over a period of ten years with week by week goals. The more you can prove the stability of your business, the better.

Asking for Loans
Now you need to put all of your funding strategies to use. Go to the bank and ask them three important questions to ensure they are qualified to handle your requests:

1. What will your bank loan me without financials?
2. What is the current debt-to-income-ration you are using?

What is your minimum accepted credit score?
You will have to fill out an application form and they will have someone revise it to determine whether you will be accepted and what the premiums will be. Never ask for more money than what you really need for a loan.
If you fail to get a loan you can choose to go to a different bank or lender, wait to increase your business credit further, or try putting down a personal guarantee. Putting down a personal guarantee is not recommended since it puts your assets at risk. If you need more help on funding strategies you can go online for more information.

As the Nations Leading Expert in Business Funding, Pat Gage has created a system for raising unlimited money for any business. The system is called "10 Steps To Money�" and has assisted many of his students and himself in raising hundreds of thousands of dollars for their businesses. Pat is not only a sought after business funding expert but also a national speaker and frequent radio show guest. For more information on any topic discussed, visit Pat Gage's site at http://www.10StepsToMoney.com

--> _______________________________________________________ Every year, the government--local, state, and federal--gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up business grants, sources, how best to fill out applications, grant management step by step tips, setting up a business steps at his website Grants to Start a Business
L. Edward helps people to start a business, get grant money, build, market online at Home Business Management
Learn where to find money for funding starting a business, grant sources, grant programs. Our onsite free information will walk you through step by step setting up a business as research required , business types, business plan, start up costs, business license, taxes, funding. Grant Programs and sources include Government Grant Money as Federal grants, State grants , Local grants, Federal assistance, grants.gov and Development Offices. Learn the Business Grants Step Management and 'know how' to spend your time, proposed business clarity, know your business needs, know how to avoid scams. Learn online step by step How To Write A Grant Application including how to write a business proposal, the summary, grant justification, project description, budge, qualification proof, outsourcing if needed.
Get A Free Legitimate Home Based Business Report , Internet Business Ideas and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leons Home Business Website Internet Home Business Leon Edward Helps people to start, grow legitimate Internet Based home business income with business structure, small business legal service information, step by step guides and online business training articles, reviews, marketing blog and newsletter... with legitimate business ideas and opportunities as top BBB rated home businesses, turnkey internet business, a 3 steps to internet income business proven mlms, even a start free work at home program Also for self Improvement visit Personal Development Training and Brain Training Software

How To Use State Grants Funding Money For Your Home Based Business Start Up Idea

What they can be used for

State grants are primarily for funding business expansion rather than for start-up costs. There are some exceptions, one being if your new business will be located in an economically depressed area and you will hire local people to work for you. Another is if you want to start a business that will improve the environment in some way, such as a recycling business of some kind. If you are looking for state grants that would provide for a reduction of certain taxes you would normally have to pay, they are available as well because states want to encourage new businesses to form within their states to provide new business and jobs to the area.

What they can't be used for

State grants tend to not cover start-up costs for a new business. You usually will not be able to go out and rent a building or buy machinery or advertise your new business with this type of funding. This sort of funding is often more available at the local level, as we will take a look at next.


Every year, the government--local, state, and federal--gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up business grants, sources, how best to fill out applications, grant management step by step tips, setting up a business steps at his website
http://www.business-idea-grants.com/

Learn where to find money for funding starting a business, grant sources, grant programs. Our onsite free information will walk you through step by step setting up a business as research required , business types, business plan, start up costs, business liscence, taxes, funding. Grant Programs and sources include Government Grant Money as Federal grants, State grants , Local grants, Federal assistance, grants.gov and Development Offices. Learn the Business Grants Step Management and 'know how' to spend your time, proposed business clarity, know your business needs, know how to avoid sccams. Learn online step by step How To Write A Grant Application including how to write a business proposal, the summary, grant justification, project description, budge, qualification proof, outsourcing if needed.

Get A Free Legitimate Home Based Business Report , Internet Business Ideas and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leons Home Business Website
http://www.homebusinessit.com/

Leon Edward Helps people to start, grow legitimate Internet Based home business income with business structure, small business legal service information, step by step guides and online business training articles, reviews, marketing blog and newsletter... with legitimate business ideas and opportunities as top BBB rated home businesses, turnkey internet business, a 3 steps to internet income business proven mlms, even a start free work at home program

State Business Grant Money For Start Up Ideas

No matter where you live, each state offers a selection of grants to people living in the state. At the state level is where you will likely find grants for attending school. This might be a pre-start-up cost for you if you require some training before you begin your new business, so this is an indirect advantage of grant money available at the state level. Although many of these programs are focused on providing state grants for low and middle-income students to attend college, there are some grants available for businesses.

For example, did you know that on the Governor of Texas's website they list procurement opportunities? If your business sells furniture, or if your business provides services such as computer programming and service, maintenance and repair, moving services, or temporary personnel, then your business might be eligible to "procure" the contracts and you would make the money for them. This is not a grant per se, but it does offer the opportunity for a business to get money that does not have to be paid back.

If you are in New York, the state's Governor's Office of Regulatory Reform site offers tax credits for businesses that operate and are certified in the Empire Zone. This will save your business money, and make it easier for you to stay in business and put your money toward expanding the business rather than paying taxes. New York also offers low-rate loans for existing small business expansion.

If you want to relocate a business to New Jersey, the state offers a grant in the form of tax credits to offset your business taxes. The grant can be as high as eighty percent of your taxes, so it definitely pays to look into these types of opportunities at the state level. There are also grants available for employee training in job safety and health and basic literacy skills.

If you live in Connecticut, according to the state's office of Policy and Management you may be eligible for a grant for $10,000 if you are an individual or company with less than 30 employees that has created a renewable energy technology that has not yet been sold. You can use the money for such purposes as product development and testing, developing your business plan or meeting your payroll, among others.

This is just a small selection of what type of business assistance is available at the state level, but it gives you a jumping off point of some of the places in your state where grant money might be available. It also is wise to remember that, in terms of state grants, many foundations and non-profit organizations give grants to people living in a particular state, but mostly those people have to be a non-profit organization or affiliated with one and not an individual in order to qualify.


Every year, the government--local, state, and federal--gives away millions of dollars to people just like you for business ideas. Leon Edward shares information on government funding, Federal, State ,Local Grants , where to find start up business grants, sources, how best to fill out applications, grant management step by step tips, setting up a business steps at his website
http://www.business-idea-grants.com/

Learn where to find money for funding starting a business, grant sources, grant programs. Our onsite free information will walk you through step by step setting up a business as research required , business types, business plan, start up costs, business liscence, taxes, funding. Grant Programs and sources include Government Grant Money as Federal grants, State grants , Local grants, Federal assistance, grants.gov and Development Offices. Learn the Business Grants Step Management and 'know how' to spend your time, proposed business clarity, know your business needs, know how to avoid sccams. Learn online step by step How To Write A Grant Application including how to write a business proposal, the summary, grant justification, project description, budge, qualification proof, outsourcing if needed.

Get A Free Legitimate Home Based Business Report , Internet Business Ideas and Free Internet Business Library with Online Business Ideas, Free Training Newsletter at Leons Home Business Website
http://www.homebusinessit.com/

Leon Edward Helps people to start, grow legitimate Internet Based home business income with business structure, small business legal service information, step by step guides and online business training articles, reviews, marketing blog and newsletter... with legitimate business ideas and opportunities as top BBB rated home businesses, turnkey internet business, a 3 steps to internet income business proven mlms, even a start free work at home program