Easy Business Loan

By: EconomyWatch Content   Date: 17 December 2009

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Getting your venture up and running is no mean task and securing an easy business loan is a great way to start. Business loans are used for purposes like buying real estate, construction, renovation, buying equipment and machinery. For securing a business loan, prepare a business plan that shows the required amount to be borrowed, the purpose of the loan and why you feel it is necessary. Also, list your assets and collaterals, and chalk out a repayment plan. You will also need to offer your company’s financial history, cash flow projections, and a detailed report where your business would be in the next 3-5 years.

Easy Business Loan Funding Sources

Choose the right source of funding your business from the following sources:

Banks: They offer a wide range of funding including short and long term business loans, SBA loans, credit cards, accounts receivables, etc. The loan is usually secured and is regulated by various local and Federal laws. The requirements may vary in various institutions but the paperwork involved is usually overwhelming. The repayment policy is fixed with banks.

Private investors: The source is usually very diverse ranging from retirees to corporate big shots. The source is not regulated and the key lies in the participation level (partnership, fixed income, etc) of the investor in your project. When approaching private investors, do a study of the investment laws in your state. Private or angel investors typically look for a high ROI and a deferred profit until a second round of financing, or an IPO.

Venture capital: There are many VC firms that would finance anywhere between $1 million to several million in your venture. VC firms always look for higher returns in a relatively shorter period of time. VC firms also require your business to have a strong management with high industry-specific experience. Many VC firms prefer investing in ventures that are potential buyouts or candidates for an IPO.

Equipment leasing: An equipment leasing company can provide you with new or used equipment for your industrial requirements. These companies are less regulated than traditional banks. Structure your payment schedules with the possibility of buying the equipment at the end of the lease term.

Government programs: The Small Business Administration (SBA) facilitates financing for small businesses and minorities, and arranges various business incubator initiatives. Depending on the economy, the SBA comes up with different funding plans and tax incentives to attract various businesses.


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