Business Financing for Small Businesses

Business financing can be a confusing and complicated process. Finding the capital you need for business purchases sometimes requires using your personal credit, or using your credit rating to secure financing from lending institutions.  You may have a great a idea, but you may be called on to demonstrate its credit worthiness.  Many great ideas stumble at this stage of the business building process. 

Basic planning requires that you know the answer to these three questions:

1. What will you use the money for? 
You must know exactly where the money for the business financing will be used. You must be specific, as generalities are recipes for disaster. Carefully identify the areas where money should flow into your business.

2. How much money do you need? 
You should calculate the amount of business financing you need so that you will have enough to carry you through initial startup and into your first several months of operation. It's necessary to have a realistic picture of your needs. Many businesses fail because the money runs out before the business reaches profitability. Inadequate financing is the major cause of business failure.

3. How will you pay back the money? 
You must have adequate cash flow from your business to repay the money to your source. Before asking for funds, make sure you have a plan to pay it back.

The money needed to operate and maintain a business falls into two categories: expense and capital.

Expense money is used to fund the operating expenses of the business such as office supplies, vehicle operation, employee expense, and there are several methods of making business purchases.  

Capital expenditures represent the fixed or current assets of the business such as real property, equipment, furniture, etc.  These items are carried forward on the books and depreciated over time.  These are long-term purchases that represent the value of the business.

The following links are some possible sources for  financing

fbibusiness.com
fbibusiness.com provides business loan solutions for unsecured small business loans, small and large business loan, business factoring, business equipment leasing and various business loans and business cash advance credit lines. No amount to large.

America's Business Funding Directory
Search for loans or equity capital from a universe of more than 15,000 sources.

America's Business Finance Directory
Plenty of info including financial workbook, list of Small Business Development Centers and venture capital clubs.

angel-and-venture-capital-guide.com
Information Guide and Key Tips for Raising Capital with Angel Investors, Venture Capital and Private Equity Firms. Also, great tips on preparing your Business Plan.

Venture Associates
List of venture capital clubs, articles on getting financing.

Venture Capital Online
Matchmaker service.