Starting a small business is a scary thing. Most data shows that while 80% make it through their first year, only a 1/3 will make it to a ten year anniversary. Despite this, the same reports indicate that being a self-starter and an entrepreneur is generally viewed as a positive thing. One of the main reasons that businesses fail within their infancy is the lack of capital sustaining the business. However, because the business is young, it’s difficult to get credit without the individual business owner either personally guaranteeing or at least being subject to a credit check. In this sense, the small business is the business owner and vice versa. But what if your credit isn’t that great? Will this make it impossible to take out loans? Here are some tips to generate capital to fund your small business.
Head to your Credit Union or Local Banker
Remember the movie, “It’s a Wonderful Life?” The neighborhood bank was a central figure in that movie, and while today the big banks may have more advertising power, the local banks are still holding strong in some neighborhoods. While the big banks may focus on the numbers a bit more, a local bank may value and may factor in a personal relationship between you, the banker, your business and the community. Bankers know that investing in your small business may means potential jobs, wealth and money into the community. Now, this doesn’t mean that you can walk into a local bank and expect special treatment. A good business plan, up-to-date and organized financials, and an ability to pay back is still going to guide your conversation. However, a credit union or local banker may be able to do what a big bank cannot.
Small Business Loans
The U.S. Small Business Administration is a government resource whose mission is to promote small business. Its function is to guarantee loans made out from private banks. The government is essentially backing your business and becomes your safety net. Of course, like the local banks, it is not giving out money for just showing up. The application for an SBA loan includes a business plan, profit-loss statements and other in-depth analysis of your business. For more information, click the link here.
In Illinois, there are many resources to turn to that may be able to assist in the task of getting loans. In addition, they are great resources for education on not only credit, but other aspects of business:
· Small Business Majority is a non-profit group whose mission is to sustain a fertile environment for entrepreneurial growth and to provide resources to entrepreneurs to grow.
· Center for Economic Progress focuses on personal financial health and education. It also has tax professionals that can help prepare taxes.
Text BIZ to (312) 620-6499 for a Free Evaluation
The Shimotake Law Firm, LLC is available to talk today about your small business dreams! Text BIZ to (312) 620-6499 to set up an appointment today!