Launching your business is a major first step in your business journey, you will have many more conversations dealing with this subject, take a deep breath and inhale, now exhale. The reality is no one is waiting on the side-lines to give you money to start your new business or because you think you have a great new business idea!
Of course the #1 way to fund your new start up business is self-funding, also call bootstrapping. But let’s face it, some of us may not be in a position to do this; so let’s look at other funding avenues and how to go about the process.
- Pitch to family and friends
- Angel investor groups
- Crowdfunding campaign
- Join an incubator or accelerator organization such as http://www.ycombinator.com/
- Request a small business grant from government funds allocated to support new technologies, education, medicine or social needs.
www.grants.gov is a good place to start, the process is long, but it doesn’t cost you any equity
- Trade equity or services for startup help
- Seek a bank loan or line of credit – the most common
Connecting with business friendly bankers
- Preparing to meet the banker
- How do you choose a bank for your business?
- What documents are required by the bank?
- How to obtain those documents?
Here are a few things to help you decide on which bank is right for your business?
First, make a list of the services you want. Are you looking for low fees or no fees, business line of credit, an SBA loan or a combination of these services? Now rank the items in order of importance, and start shopping.
At each bank, ask for a meeting with the business banker, your goal is to start a business relationship with the bank. During your meeting ask a few questions:
- Do they make small business loans?
- What volume or percentage of business loans close
- Does the bank offer SBA loans and are they a Preferred SBA Lender
- What business resources do they offer, such as on-line bill pay, payroll deposit or direct pay, mobile banking, spending report/budget watch?
- Does on-line resources such downloadable account statement interface with such accounting software such as QuickBooks?
- Do they offer merchant services
- Is there a business banking support team?
You will have a clear picture whether this is the bank for your business or not. Of course the ultimate test will be to apply for a small business loan. Apply to several banks, then track to see who respond or not.