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Start-Up Financing

Starting a new business can be an elaborate exercise and difficult challenge facing entrepreneurs. A business plan has to be developed and vetted, talented employees hired, location found, and financing lined up before the startup venture can open its doors. Startup ventures can be less daunting when the entrepreneur acquires an existing business, or purchases a franchise operation. In each case the business structure is already in place and the organization has a track record.

In most cases the SBA Guaranteed Loan Program may be the best financing vehicle for your start-up venture. The SBA considers a number of factors in its credit decision. The applicant must:

	Have direct experience in the line of business and can demonstrate management capability
	Inject at least a third of the total project costs
	Be of good character and have a history of repaying debts as agreed
	Provide adequate collateral (as a general rule, the SBA will not turn down a loan request due to lack of collateral)
	Feasible business plan that details how the business will make money

Most startup ventures require a financing package that covers a combination of uses of loan proceeds, including financing inventory, machinery and equipment, furniture and fixtures, leasehold improvements, working capital, and commercial real estate. The loan term will vary depending on the use of loan proceeds. It may be as short as 5 to 7 years for working capital, or as long as 25 years for a purchase or construction of owner-occupied commercial real estate. In cases when the loan proceeds are used for a variety of purposes, then a blended term is likely to be structured.

Entrepreneurs who have significant equity in their homes may find that leveraging the equity is an ideal solution for their business financing needs. We also provide Mortgage Financing services. So don't hesitate to contact us if you think leveraging the equity in your home to start a business makes sense. Or, even if you just want to refinance your existing mortgage with a lower rate so you won't have to draw as much from your business to cover personal living expenses.

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