After outlining your business plan, the financial requirements of your business should become clear. Here are tips to help you find the right financial resources.
Are You Ready for Financing?
- Develop a Business Plan: Create a written document describing your business, including type of business and legal form, annual sales, number of employees, length of time in business and the ownership structure.
- Determine Financing Needs: Identify all startup expenses, estimate the costs of your business for at least the first several months and create a realistic startup budget and cash flow model.
- Discuss Your Credit Score: Creditors use your credit score to determine if you qualify for additional lending. Credit scores help predict who is most likely to repay debt and make payments on time.
Types of Financing Available
Debt financing involves lenders such as banks, commercial finance companies and government-related lending. Depending on financial plans and goals, one of the following programs may suit your needs.
The Small Business Administration (SBA) is a group of independent agencies of the federal government created to aid, counsel, assist and protect the interests of small businesses. The SBA operates a loan guarantee program which can assist with up to $2 million dollars in potential financing.
The Small Loan Advantage and Community Advantage Loan help small businesses owned by minorities, women and veterans or companies located in low-to-moderate income areas.
Council of Governments Loan Programs partner with local counties, cities and towns to provide resources to foster economic development, usually in the form of a revolving loan program.
The SC Capital Access Program (SC CAP)
The SC Capital Access Program (SC CAP) is designed to provide financial institutions with a tool to assist with business loans in which public resources are used to generate financing.
Equity funding requires selling an ownership interest in the business in exchange for capital. There are several options when considering who should invest in your company.
Seed capital funds may assist your financial goals through funding in the form of loans and equity. SC Launch offers technology based companies commercialization support and guidance as well as up to $200K in seed funding.
Angel networks are a good place to begin your search for funding. They are member-driven organizations that work to help support high-growth economic development in the region.
United States Department of Agriculture (USDA) Rural Development operates more than fifty financial assistance programs for a variety of rural applications.