Learn How To Obtain Minority Business Grants - Minority Small Business
Grants or Black Business Grants.
Top
Link:
Paint a Picture of Your Success with Carol's Art Shows. Acquire fine general,
ethnic and African Art from contemporary artists. Start an independent
Art consultant business. Raise money for your favorite church or charity.
Check out the art and opportunities at www.carolsartshows.com
Check
Out the Digital Divide Bulletin Board for:
Black
Business Grants
Minority Business Grants
Small Business Grants
Small Business Loans
Black Business Loans
Minority Business Loan
Minority Scholarships
Grants for Black Women
ClicK Here your Internet
business or Off line business by taking these:
Power Moves for
People of Color
News Wire
Under Construction
|
"Special Report"
Financing Your New Business Page 3
__________________________________________
This Information Sponsored
by:
Ebiz
by Design
For Promo - Sales Copy - and Design To
Enhance Your Bottomline.
__________________________________________
Financing
Your Home Business
© 2003 Elena
Fawkner
So,
you have a great idea for a business and, more importantly, the know-how
to bring it into creation. The only thing you're missing is the cold hard
cash to get started. What are your options?
Assuming
you don't have a ready line of credit, an expansive bank manager, wealthy
relatives or a substantial stash of retirement savings you're willing
to risk, you're going to have to do some serious homework and legwork.
Fortunately, there are a number of sources of finance for the fledgling
small business entrepreneur, at least one of which may be right for you.
SBA
LOANS
Available
only to U.S. based businesses (but look for similar programs in your own
country if you're outside the U.S.), the SBA (the U.S. Small Business
Administration) has assisted thousands of entrepreneurs start their own
small businesses. The SBA doesn't issue grants (money you don't have to
pay back) or make loans directly, rather, it guarantees loans made by
private lenders thereby reducing or eliminating the risk inherent in new
business ventures and making lenders more willing to lend.
The
primary consideration for the SBA is repayment ability from the cash-flo
of the business as well as "good character, management capability,
collateral and owner's equity". You will be expected to personally
guarantee your loan. This means your personal assets are at risk.
As for
the types of businesses eligible for SBA loans, the SBA imposes the following
criteria: the business must be "for-profit" (all that means
is that your business have a profit motive, not that it have actually
generated a profit yet), be engaged in business in the United States,
there must be "reasonable" owner equity (what's reasonable will
depend on the circumstances) and you are expected to use alternative financial
resources first, including your own assets where practicable.
The
SBA also imposes limitations on the use of loan proceeds. For example,
although the proceeds can be used for most business purposes (the examples
given by the SBA include "the purchase of real estate to house the
business operations; construction, renovation or leasehold improvements;
acquisition of furniture, fixtures, machinery and equipment; purchase
of inventory; and working capital"), you can't use the loan proceeds
for financing floor plan needs, to pay existing debt, to make payments
to the business owners or to pay delinquent taxes etc.
As a
general rule, loans for working capital must be repaid within seven years
and loans for fixed assets must be paid for by the end of the economic
life of the assets (but not to exceed 25 years).
Interest
rates are negotiated between the borrower and the lender but the SBA imposes
maxima which are pegged to the Prime Rate.
Finally,
the SBA charges lenders a guaranty and servicing fee for each loan approved,
and there is nothing preventing the lender from charging these fees to
the borrower. The guaranty fee for a loan of $150,000 or less is 2% of
the guaranteed amount; over $150,000 but below $700,000, it's 3% and above
$700,000 it's 3.5%. The annual servicing fee is 0.5% which is calculated
on the then-current loan balance.
Where
the borrower meets the SBA's credit and eligibility requirements, it will
guarantee up to 85% of loans $150,000 and less and up to 75% of loans
above that amount (up to a maximum of $1,000,000).
For
more information about the various SBA loan programs, visit the SBA website
Click Here.
PRIVATE
GRANTS
At present,
there are no U.S. government grants offered for small business. If you're
outside the U.S. check with your own government about the availability
of small business grants. You never know!
Various
corporate grant makers make grants available for small business though.
For more information, visit the FDN website Click
Here.
ANGEL
INVESTORS
Angel
investors are good souls with a healthy sense of self-interest. Figuring
they can get a higher return if they're prepared to take a bit of a risk,
they're also often successful entrepreneurs themselves and want to give
their fellow travellers a hand up.
Think
of funding from an angel investor as a bridge or gap-filler between being
a start-up and qualifying for venture capital. The kinds of dollars we're
talking about here are between about $150,000 and $1.5 million. Beyond
that point you're in low venture-capital territory.
The
SBA estimates that there are around 250,000 angels in the U.S., funding
about 30,000 companies a year. So, how do you hook up with one? Not an
easy task, unfortunately. It comes down to networking. Start by talking
to professional and business associates - they will often know someone
who knows someone etc. Also, check out ACE-net if you're prepared to sell
a security interest in your company. It's an internet-based listing service
for securities offerings of small, growing companies. The website is at
Click Here.
VENTURE
CAPITAL
You're
in the big leagues now. Generally you're in the ballpark of millions (of
dollars that is) rather than thousands. Venture capital firms look for
their return on investment from capital appreciation rather than interest
(unlike banks, for example). They're generally looking for a return of
500-1,000% on exit.
It won't
surprise you to learn that venture capitalists are particularly leery
of internet-based businesses right about now and not surprising. It also
serves them right. But if you have a solid business plan and strong growth
potential, this could be an option for you longer term.
One
of the common concerns about this form of financing, however, is that
you may have to part with an unacceptable amount of control over your
own business. In return for their risk, venture capital firms will usually
want some control over how the business is run and a say in business decisions.
A venture capitalist will expect a seat on the board, for example.
It's
important to remember, though, that it's in the venture capitalist's best
interests for your business to succeed, so giving up some control in exchange
for outside expertise may well be something worth thinking about.
To find
venture capitalists, get a hold of "Pratt's Guide to Venture Capital
Sources" for a listing of 1,500 or so including names, contact details
and areas of interest. Of course, you'll find no shortage of information
online as well.
For
most readers of this article, your best bet would be to start out by investigating
the various loan programs offered via the SBA (or your country's local
equivalent). But don't overlook more obvious, close to home sources first.
If you have family funds at your disposal (for example) and you're confident
that your business will succeed (and unless you're confident about that,
don't get into debt with *anyone*, let alone
family members), better to start out slow and ease into outside sources
of financing as your business (and, more importantly, your business's
cash-flo) can
support it. After all, Uncle Jack is much more likely to be understanding
about the occasional cash-flo crunch than Uncle Sam.
------------------------------------------------------
Elena
Fawkner is editor of A Home-Based Business Online ...practical business
ideas, opportunities and solutions for the work-from-home entrepreneur.
http://www.ahbbo.com
------------------------------------------------------
__________________________________________
Could
You Use Additional Income?
Learn
to Earn Significant Income Representing Products that almost Every Business
Person or Professional Needs -- FREE!
I make my Personal
Recommendation that These Products are the Best Online Marketing Products
of their Kind. Kamau Austin
__________________________________________
Back
to Special Report Start Page Click Here
|
Discover
SBA Loans for Minorities at Einfonews.
"Editors Choice"
Dynamic Resources
and Tools To Help
Build
Your Web Business
View
these Resources
for Unstoppable E biz
Success!
The Best of the Best ...
Planning
Your Internet
Marketing Strategy
by
Dr. Ralph F. Wilson. See the Book
Review.
Order
from Amazon
SiteSellit!
by
Dr. Ken Evoy, This Ebiz Primer is considered
the
Bible for Running a
Successful Web Business. Absolutely the Best
e business value
available in e book form.
Click
for More Info
Search
Engine Fast Start!
by Dan Thies. This E book
has helped me make
incredible gains in my
search engine promotion
and ranking. I give it my
Highest Recommendation.
See the Book Review.
Web
Commerce Today
-
Sign Up for this web newsletter and Business Article Database of over
5,000 Resources by
Dr. Ralph Wilson one of
the Internet's Top Marketers. Sign
up Now
Word
Tracker the
Ultimate Search Engine
Keyword Research Tool
Get
More Info Here
Hot
Link
www.3ammagazine.com - "From 'cutting edge short fiction' to political
satire and music reviews, 3AM is a dream publication for the young, literary
and clued-up..." - Times London
|
