If you are planning on starting a new business or hoping to grow the business you currently own, there is a very good chance you’ll need some type of funding to get to next steps. There are many financing options available, but before you leap into the land of lending, take some time to research the following questions:
How Much Money Do I Need to Start?
No two businesses are exactly alike. Even in a franchise business, the money needed for startup funds can vary from location to location. Before you can begin to look at financing sources, it’s important that you understand what your financial needs will be. This might include ‘seed’ money, to help cover the costs of doing business in the first few months of operation, as well as funds to cover ongoing fixed expenses (rent, utilities, administrative costs, etc.) and variable expenses (inventory, shipping costs, sales commissions, etc.). Here are some tools to help identify your financial needs:
What Does My Financial World Look Like?
Just like no two businesses are alike, no two businesses will have identical financing needs. The money you might need as a startup business may be different from what a more established business will use. Are you a retail business? A manufacturing company? The type of industry sector your business is in might also affect the type of financing you can use. The more you understand about your industry and current financial needs, the easier it will be to identify the programs that make the best fit. Finding answers to a few key questions
will help you begin down the financing path.
What Will a Lender Need to Know?
Unless you’ve discovered you can totally fund your business by using your own money, chances are you’ll be approaching a lender or investor for financing. Here’s some key factors a traditional lender may look at
when evaluating your loan. In addition to what a banker may look for, a private investor may have additional questions
before considering financing.
What Financing Programs Are Available?
Now that you’ve taken some time to get a better picture of your financial needs, the next step is finding out what financing opportunities might work best for your business. There are many types of loans
you may qualify for, or you may decide to borrow from people you know.
Below are links to some local resource organizations that provide financial resources for Baltimore area entrepreneurs: