1) Estimate the Amount of Funding You Need
To secure financing for your business you will need to determine your budgetary needs. This includes “seed money” to cover the costs of doing business the first months and ongoing essential costs, including fixed (rent, utilities, administrative costs, and insurance), and variable (inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service). To learn more about this important topic:
2) Determine the Best Source of Funding
Funding for startup and growing businesses often depends on your stage of business and the amount of money you need. Before seeking financial assistance, completing a thorough assessment of your financial situation is critical. Key questions to help with this assessment will prepare you for identifying the type of financing that best fits your needs. If you do decide to borrow be prepared for the factors the lender will use to evaluate your loan application.
3) Put Together a Business Plan
Most outside financing sources will require a business plan that outlines how and when the funder will be repaid. For help with business planning, including cash flow projections, go to our Plan Your Business section.
4) Get Information About Various Types of Funding
Once you know how much money you need, now you can get more information about the types of funding sources: