Friday, August 22, 2008

Loans for Business Start Ups

Starting a business is pressure enough. Trying to find loans for business start ups is doubly difficult. Your local Small Business Development Center can help. The Small Business Development Centers are funded by the Small Business Administration and the local community colleges. Their counselors can provide you with direction on what types of loans are available for small businesses in your area.

Many cities have offices to help business start ups, as do many chambers of commerce. The cities themselves sometimes offer localized loan programs. These programs are to encourage businesses in disadvantaged areas of the city. Some of the city loan programs are tied to increasing employment in the area.

Another option is to contact your local SCORE (Service Core of Retired Executives) office, many of the SCORE participating executive come from the banking industry. They’ll know which bank is actively recruiting small business loan applicants and which banks aren't.

One word (okay more than one) about loans from the government. The US Federal government has an office called the Small Business Administration. The SBA does not make loans for business start ups directly but guarantees the loan to the financial institution who actually makes the loan. There are no grants through the SBA. Contact your bank to see if they participate in the SBA loan programs.

Don't overlook a credit card as a way to get a loan for a business start up. Many cards offer low rates for the first six months. If your personal credit rating is good you should be able to get a card (or two) to get your business going.

You might reconsider whether you actually need a loan for your business start up or whether there might be other ways to finance your business. You might consider trade and barter, getting merchandise on consignment, leasing equipment including office furniture, or obtaining 90 day payment terms for inventory you purchase.

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