Small business funding provides working capital for your business through debt or equity financing.
Small business funding is readily available to all businesses and entrepreneurs. These funds are available through business loans, investors, SBA (Small Business Administration) programs, lines of credit, accounts receivable factoring, merchant account factoring, business credit cards, and more. Obtaining the right amount of small business funding can be a difficult task for your business, so it is extremely important that you understand what it takes to get capital.
Being prepared before actively going after small business funding will reduce the chance that you will come up short on your quest for business capital. Financing your business is arguably the most important aspect of any business because nothing can take place without necessary funding. Having a completed business plan with a detailed budget showing how the funds will be used, will be huge with the lenders.
It is also good to have all of your business documents filed with the state and make sure that you have a business bank account already established with some funds in the account before going after the loan. On top of this you will want to have started establishing some sort of business credit history. This is not to be confused with personal credit, as it often is.
Establishing business credit takes time, but it is well worth the wait to setup your business right when going after small business funding. You can start establishing credit by taking out small lines of credit and other financing from lending institutions that report your payment history to the Small Business Financial Exchange.
An effective strategy is to obtain 1 small bank loan, 3 business credit cards, and 5 vendor lines of credit. These will all work together to increase your credit scores. Our Business Finance Coach shows you step-by-step how to setup your business the right way to ensure you receive the funding you need to be successful.