 Sources of Financing for Small Business
Where can I find money for my business? That is the number one question I am asked by business owners.
The first place I tell them to look is at their own resources. Lenders want to see that you have invested in your business before they will give you their money. Your own savings, investments and credit cards are the first places where you may go.
Besides using your own money, other places you can look for financing your business are:
Bank Loans This is one of the first places business owners look when financing their business. Bankers look at the 5 C’s of credit when considering loan approval. These are listed in the Top 5 section of this newsletter.
Trade Credit Your suppliers can provide credit to you through invoice payments due 30 to 60 days from purchase.
Factoring A factor buys your accounts receivables at a discounted rate, and then the factor collects the money. You get your money for your invoices immediately without having to wait for the customer to pay.
Equipment Leasing Lease your equipment, rather than buying it to avoid spending a lot of money initially on equipment.
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| In the newsletter this month, you will get useful information on finding money for your business. It provides you with tips on the credit process and ways to finance your business growth.
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| Top 5 Tips-5 C’s of Credit: What Lenders Look For |
- Capacity-ability to repay the loan
- Capital-the money you have invested in the business
- Collateral-security for the loan, if you cannot repay it
- Conditions-economic and industry issues which might impact the loan repayment
- Character-willingness to repay debts credit and repayment history
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| Resources |
New Law Promotes Access to Free Credit Reports
Recent changes to consumer protection laws entitle you to receive one free credit report every 12 months from each of the three nationwide consumer credit reporting companies. These companies, Equifax, Experian and Trans Union created AnnualCreditReport.com as a centralized service for consumers to request the annual reports.
You are encouraged to regularly review your credit reports for accuracy and completeness. Be advised that there are similar websites, with similar names, offering to do the same thing for a fee. The three reporting companies have only authorized AnnualCreditReport.com for this service.
The free reports may be accessed online at www.annualcreditreport.com, by calling (877) 322- 8228 or by submitting the required application by mail, which is available on the website.
Deadline Approaching for eBusiness Boost Challenge
Entrepreneur Magazine and ProStores are launching an essay contest to identify six companies willing to disclose business successes and challenges. The winners will be given a business shape up including business consulting services and media coverage in Entrepreneur Magazine.
Winners will be selected based on business challenges, goals and dedication. Contest ends April 21, 2006. For further information, visit http://ebay.promotionexpert.com/prostores/entry/spla sh.html.
NYC Small Business Awards 2006
Small business owners will be eligible to compete for grants ranging from $10,000 to $50,000 as part of the second annual NYC Small Business Awards. This grant program recognizes businesses that have demonstrated success in NYC. Business will compete in three categories based on revenue size. It is sponsored by the NYC Commission on Women’s Issues and NYC Business Solutions. Applications must be postmarked by April 21, 2006. For further information, call (718) 864-8888 or visit www.nyc.gov/women. |
| Reader's Corner |
In the Reader's Corner, we want to hear from you. Each month we will have a section where you tell us your "Top 3" on a topic. This month, email us with your Top 3 Ways You Financed Your Business. Email us with your answer.
Besides the Top 3, feel free to write us. Tell us a funny story that happened in your business, ask us a question or just drop us a note to tell us how we are doing. Send us an email. |
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