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Loans for Starting up a BusinessIn the contemporary world of business, finding the capital you require to start your business is considered not very easy. The traditional sources of capital, such as personal resources or funds raised from family and friends, often aren't enough. When you conceive a business idea and you start applying for a business loan, you'd logically think a lender's "No" would sound the death knell to your chances of obtaining financing from that lender. But according to Charles H. Green, author of The SBA Loan Book (Adams Media), "No" doesn't have to be the end of the line for your loan.Each year, more and more entrepreneurs bypass the corporate ladder to take a shot at realizing a dream: owning their own businesses. This has resulted in the innumerable small business firms being set up and they are flourishing. In the United States, the largest single contributor to assisting new business start-ups is the Small Business Administration or SBA. As in buying an existing business, the applicant must contribute at least 25%-33% of the total business plan. The balance of the capital required can be financed with the loan. You may use the proceeds for just about any business purpose, such as Working Capital, purchase of Machinery, Equipment, Furniture, Fixtures, Opening Inventory or even use the funds to make Leasehold Improvements. The applicant must have a solid credit history and a complete business plan. SBA loan programs are generally intended to encourage longer-term small business financing, but actual loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed. Besides the SBA route and other financial services companies, most start-up businesses at some point consider approaching a bank for a loan. When that time comes, an understanding of what the bank will want and need to see is crucial. Finally, remember that when you are applying for a business loan, you have almost set the hook. Whether you reel in the big one or cut bait and go home will depend on how well prepared you are. The financial institution is making a long-term investment in you, and it's important to prove that you are prepared to make your business work. |
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