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Common Business Questions
I need money for my business, what financing choices available?
As an entrepreneur you have the following choices:
Personal, Family and Friends funds, these include savings, investments, retirement funds, credit cards, home equity loans, home equity lines of credit, etc.
Small Business Administration (SBA) guaranteed loans Lines of Credit and Term Loans.
The SBA guarantees a portion of the loan to the lender, so in case the borrower defaults, the lender can ask the SBA for the repayment of the guaranteed portion. (You are still responsible for the loan, so your obligation does not go away).
Commercial Loans: Lines of Credit and Terms Loans (without the SBA guarantee). Banks usually require businesses to be in operations for at least 2 years.
Alternative Lenders These organizations that specialize on clients with bad credit, no credit, or with a short credit history. Their loan amounts tend to be lower than a Commercial Bank.
Community Based Lenders These organizations work for a development of a community or in a defined area.
Asset Based Financing: Factoring, Purchase Order Financing, Equipment leasing, etc. The borrower will use account receivables, purchase orders, or other assets as collateral. The borrower does not need to be in business for 2 years since the financing company uses the buyers’ credit when assigning the loan.
Non-Bank Lenders These institutions do not conduct consumer banking but offer business services and business loans. Their requirements vary depending on the institution, and they may specialize in specific industries.
The Non-bank lender could take a longer time to process your loan application, but they can do deals that regular banks find to risky
Angels Investors These are high-net-worth individuals who invest in early-stage companies. They are usually former entrepreneurs who are now looking to invest as well as provide their expertise.
Venture Capital Venture capitalists raise money from investors in order to fund a portfolio of privately held companies for a profit.
What is a "Loan Package"?
A “Loan Package” is the paperwork you submit to the bank in order to apply for a loan. The Loan Package includes the following:
* Business Plan
* Business Financial Projections
* Personal Financial Information
* Personal Tax Statements
* Information about business, location, sales contracts, etc.
* Business Owners’ Resumes
The loan officer will give you all the information necessary for the loan application. Often they require a Business Plan and Financial Projections; you can find assistance from your local Small Business Development Offices (SBDC). To find an SBDC near you go to www.nyssbdc.org. The SBDC advisors actively build relationships with lenders, and can refer you to a lender that will work with you.
What are SBA loans and how do i apply?
What resources and information is available to sell to the government?
What resources are available for Minority/Woman business owners?
Financing and Business Assistance
There are Non-Profit organizations that target Minority and Women business owners. These organizations offer training classes, counseling, peer support, networking, loans, etc. Bellow is a list of organizations that serve these entrepreneurs:
What information and resources are available for my Import/Export Company?
Import/Export Information and Assistance
US Business Advisor
www.business.gov/topics/international_trade, this is the federal government’s guide to international trade for small businesses. In this website, businesses can find essential information on laws and regulations, finance, trade leads, and associations and agencies that promote international trade.