Tips For Starting a Start-Up Business
There are so many reasons that people want to launch a business of their own. Many people who have lost their jobs have been motivated to finally do something that has meaning to them. Some stay at home moms want to earn money. Some new college graduates have ideas for developing a business. People are tired of catering to a boss, of doing mundane work, of feeling that their life has no meaning. If you are one of these people, then chances are you have an idea for a business of your own. You want to use the skills and creativity that you know you possess. Now all you need is cash.

Chances are you have no rich relative who wants to finance the start up of your business. Chances are you don't have the cash saved up to begin this business. If you can't find an investor or a business partner with cash, then you will have to turn to banks for your funding.

It is not easy to convince a bank to take a chance on you and your business idea. You will want to be educated about the process of applying for a loan. The more prepared you are, the greater chance you have of being granted a loan. You will not see any profit from your business for some time. You will need to put any money you generate back into the business. Therefore, aside from your savings, the business loan is there to keep you open while you acquire a customer base. Do not try and start a business without the capital to keep it running while you wait to earn a profit. All first time business owners will need a plan.

Develop a plan for your business.
Narrow down the products or services you will be selling, where you will do business, how many employees you will have, and how you will advertise in order to attract customers. Know the specific numbers regarding your cost to start the business, how much money you expect to earn in order to keep the business running until the loan is paid off and you are showing a profit.

Decide whether or not to incorporate.
If you do decide to incorporate, take care of that with a lawyer that specializes in corporation. The other choice would be to get recognized as a sole proprietor and acquire an EIN number. This is the social security number for the business.

Preparing for a start-up business loan.
Get your credit score from all credit bureaus. Address any penalties or negative items that you can settle and eliminate from your report before you apply for the business loan. You will need a credit score more than 710 to be considered having good credit.

Gather the necessary items to bring to the bank. Clearly your finances will be an open book. The bank is concerned with your personal financial situation as well as what you have done to prepare for the bank visit.

• Social Security Card
• Your personal expenditures and household budge
• Tax returns, including 1099's or W2 forms
• Any proof of sales or employment
• Personal bank account statements

When you are all ready, we invite you apply for one of our small business start-up loans. We have programs for good and bad credit. Our rates are competitive and we do not require plan reviews during our application process. Unlike traditional banks, we do not require that you have an income and/or savings that is equal to the amount you are asking for with the business loan. Click here to learn more about our start-up loans or simply APPLY NOW!

When working with banks for your business financing, if you are asking for a $25,000 loan, the bank will expect you to have $25,000 in gross yearly income and/or in savings or investments such as an IRA. This matching of dollars is called a one to one ratio. Be ready to explain how you expect to pay off your loan, and when.

The bank will have your application go through an underwriting analysis. This will be a comprehensive study of your income and expenditures. The bank wants to know if you have a sufficient flow of cash to allow you to afford the business loan payments as well as any other outstanding creditor bills. Usually the bank will look at the last three years of your finances. If the bank is not happy with your flow of cash then they may ask you to personally guarantee the loan. This is going to be your last resort. You want to try and avoid this because your assets will be in danger. However, the personal guarantee may be your only choice. If that is true, then try and have the bank put in writing that when the business reaches a certain level of profit they will remove the personal guarantee from the loan agreement.

High credit scores will help you when you apply for the small business loan. If the underwriting analysis reveals that you do not have any money available for emergencies, then a high credit score could influence them to take a chance on you.

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