5 Steps To Funding Your Dream Business

Getting your business off the ground takes having a plan and hard work. In most cases, getting a little start-up cash can get you rolling, but for long-term growth, you may need significant financing.

1. Explore Different Funding Options

Start-up cash is just that: it starts you off. It may be for raw goods, or your first set of tools, or your first real estate repair so you can flip a property and build up a reserve. Start-up capital can come from a family member, your personal savings or a credit card.

Experts with Lantern Credit remind us that long-term small business loans free up business owners in many ways. They can allow you to:

• refinance high-interest debt

• invest in new machinery

• get a bigger or better building

• bring another building under your umbrella

Even better, a small business loan is in the name of the small business and can take pressure off your credit. Finally, longer-term loans generally have a lower interest rate.

2. Identify Small Business Funding Sources

The Small Business Administration (SBA) is a common source of business loans if you're living in the United States.

You could also start with the bank you are currently with. However, if they don't offer business loans, consider applying with a broker. Small business loan applications can be quite onerous, especially if you're working to grow your business. Rather than deal with the work of one more application, discuss your options with a loan brokerage or a gathering house so one application can be submitted to many lenders.

3. Consider Your History

To qualify for a long-term small business loan, you will need at least two years of business history to prove you can generate revenue. The process can take time, so working with a brokerage or a clearing house is a good idea. Make sure you have your bank statements, tax returns, and profit and loss statements available to lodge your application. You'll need multiple copies of these or an electronic bundle you can send with each application.

4. Consider Your Region

There are many programs for lending businesses in economically depressed areas. Some regions offer terrific business tax breaks and credits for hiring veterans, the unemployed, and the underserved.

5. Keep An Eye On Interest Rates

While long-term loans generally have a lower interest rate, the interest can get costly over the life of the loan. Carefully review any loan offer you get. If the interest rates seem high, check your business credit rating to see if you can make repairs or adjustments to free up some credit and bring the rates down.

Your business can quickly move up to the next tier with the right loan. Expansion is always risky but staying small doesn't offer any guarantees either. Do your best to protect your business credit so loans can be accessed quickly.