April 21, 2008, 6:54 pm
Finding funding for rural businesses
Kim needs funding to grow her rural commerical satellite business. Do you have a business in a rural community? How do you grow your business?
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To fund the growth of your business you must know a few things about the banks – know who offers the programs you need, what it takes to get approved for them and – most importantly – how much to ask for. When asking for expansion capital, most business owners make the mistake of asking for more than what a lender is able to give under the company. This ultimately results in offers that tie up personal assets, making it a laborious and frustrating task for everyone involved.
To know what you are eligible for, you must first know what you have that a bank may find lendable – meaning personal credit (www.truecredit.com is a great source!), assets your company owns and what type of documentation is required for financing. Most lenders will look for verification of revenue, so if you can't provide it, then you won't want to waste your time or the banks in applying. The only thing it will wind up doing is putting needless inquiries on your credit report and a result in getting turned down.
The main arena's that business lenders today will lend to under a business are the following: merchant advance, receivable factoring or financing (there is a major difference between the two), asset based loans using equipment as collateral, commercial mortgage refinance, credit cards and unsecured business lines of credit. There are a few others, but are usually for specific situations Each carry certain advantages and requirements that are important to understand before applying. Depending on your personal credit score, you may not be eligible for certain programs and without certain documentation, not be eligible for others. Give yourself an advantage in finding out resources that will assist you in getting what you need. In many cases, you will find a benefit in using a couple of different forms of financing since most lenders won't offer each of the mentioned loan/line of credit programs. With a little homework done up front, you will put yourself in a much better financial position – not only now, but for future growth, as well!