As lenders tighten their credit restrictions, entrepreneurs are frustrated that traditional sources of small business funding are disappearing. Money is still out there but it requires more than just consulting with bookkeeping services to prepare a quick business plan and applying for a loan at your local bank. Business owners need to find funding designed for their unique business situation.
Patriot Express Loans for Veterans
One source of small business funding that is helping military veterans and reservists is the Patriot Express (PX) loan guaranty from the Small Business Administration (SBA).
The SBA began offering PX loans as a pilot program in order to provide funding to military service veterans and their families. The loans are available to veterans, reservists, National Guard members, or active service personnel nearing discharge. They are also available to the spouses of any of these people or the widowed spouse of a veteran or service member who died while serving.
These loans carry exceptional features including the fastest turnaround times and lowest interest rates of any SBA loans. Eligible veterans should work with their bookkeeping services to determine how much of a loan they will need for their business startup, expansion or other related expense.
Venture Capitalist Investment
If you are currently running your business out of your living room and it has the potential to really take off, securing venture capitalist funding may be an excellent alternative to traditional loans. This type of start-up funding is often given in the very early stages of a business when there is not much credit history established. After reviewing your bookkeeping services, venture capital firms base their decisions on your business plan, management and projected growth.
It is important to work with your bookeeping services company to research and target venture capital firms that you feel comfortable with. After all, they are not just loaning you money, they are purchasing a stake in your business and will essentially become a partner moving forward.
Traditional Small Business Loans
Just because small business loans are harder to receive does not mean they are not worth considering. For many businesses, securing a traditional loan is the key to their expansion and overall growth. Bookkeeping services companies suggest that you begin establishing business credit immediately if you think you are going to need a small business loan in the near future.
Even with poor personal credit, business owners can build up their business credit by properly managing credit cards in their business's name, leases and other large credit items. Bookkeeping services often recommend getting a tax ID and proper legal name for your business to ensure you are completely separate from your personal social security number. After a few months of building credit, you should qualify for a small loan - and when managed properly, small loans turn into large ones.
Thursday, April 30, 2009
Starting a Small Business in Tough Times
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