Funding a startup
Updated: 7 days ago
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.
1. Have a bullet proof 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 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.