Funding a Business
What does my financial world look like?
- The money you might need as a startup business may be different from what a more established business will use. The type of industry sector your business is in can affect the type of financing available. The more you understand about your industry and current financial needs, the easier it will be to identify the programs that make the best fit.
SBA offers a FREE web series – Financing Your Business
What will you use the funding for? (Is that amount absolutely necessary?)
How much money do you need to start?
- No two businesses are exactly alike. The money needed for startup funds can vary from location to location. It is important that you understand what your financial needs will be before looking for funding options. This can include ‘seed’ money, to help cover the costs of doing business in the first few months of operation, as well as funds to cover ongoing fixed expenses (rent, utilities, administrative costs, etc.) and variable expenses (inventory, shipping costs, sales commissions, etc.).
What is your plan for how you will pay it back?
What will a traditional lender look at during the loan process?
- Your credit risk – commonly referred to as “5 C’s”:
- Credit History
- Collateral (When applying for secured loan)
What Financing Programs are available?
- Find out what financing opportunities might work best for your business.
- Friends and Family
- Types of Loans
- Private Capital
Many funding opportunities require a solid business plan. Review the Startup Guide for tips and tricks to best assist in writing or strengthening your business plan.
Each county has a Small Business Development Center (SBDC) that can help you determine your startup or expansion financing needs. They also provide counseling for business planning, marketing, and more.
Friends & Family
Commercial Bank Loans
A solid business plan
Ability to repay the loan
Visit the Loans Guide to learn more about available opportunities.
Be aware of advertising suggesting a list of grants if you pay. Often this is a list of microloan programs – which you must repay – or grants for nonprofit agencies.
The federal government offers a few very competitive and targeted grants to companies developing various targeted technologies (often high technology).
Visit the Grants & Incentives Guide to learn more about available opportunities.
Example: Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants fund research and development efforts of a high-risk nature that may have excellent commercial potential.
Small U.S. businesses are eligible to participate in the SBIR/STTR program if they are for-profit and have 500 or fewer employees. Nonprofit organizations are not eligible.
Central Florida has 2 non-profit microlenders that partner with BizLink Orange.
There are for-profit lenders and microlenders. Do your research and know what their terms and conditions are before signing any agreements.
Venture Capitalist (VC)
Visit the Private Capital Guide to learn more about available opportunities.