Funding a startup

Funding a startup

Jan 28, 2022 admin

For small business owners, sourcing unsecured financing is extremely hard. Commercial banks are very hesitant to assume all the risk. The SBA steps in and does play a role here. Here are a few steps to take if searching for capital via the SBA.

There are several factors these investors will account for. Most valuation professionals use Ibbotson’s SBBI Valuation Edition for RF, ERP, IRP, and SP. The CSP is the more subjective topic open to negotiation between buyer and seller. The cost of equity (K) is equal to the sum of the following discount factors (excluding risk-free rate, all figures vary by industry and business):

1. Have a bulletproof business plan (whether new, existing business).

2. Be able to articulate how the business model actually solves a consumer problem. Be able to answer the question…”Is there a need for this type of business”. Rely heavily on industry reports.

3. Thoroughly do the sensitivity analysis in the financial model. Banks and the SBA will want to pressure test your ability to service fixed debt in the worst of times.

4. Approach the SBA under the sponsorship of at least two creditors. If asking for unsecured money, two sponsoring banks will be critical.

5. Have your own credit under control and be able to demonstrate financial responsibility and your commitment to put all the skin you have left into the game.


Benefits of S-Corp vs LLC

Jan 28, 2022, admin

What is business strategy?

Jan 28, 2022, admin

Leave a Reply

Your email address will not be published. Required fields are marked *