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How to Get Money to Start a Business

There are several options to choose from when considering how to get money to start a business.

| July 10, 2013

  • Grow Your Handmade Business
    Get practical advice on starting a creative business in “Grow Your Handmade Business.”
    Cover Courtesy Storey Publishing
  • How to Get Money to Start a Business
    If you are trying to figure out how to get money to start a business, a bank loan may be the easiest and most straightforward way.
    Photo By Fotolia/Antonio

  • Grow Your Handmade Business
  • How to Get Money to Start a Business

Expand your business beyond the dining room table with the coaching of Grow Your Handmade Business (Storey Publishing, 2012). Author Kari Chapin shows you the nuts and bolts of starting a business, from mapping a business plan to addressing legal issues. In this excerpt from chapter 18, “Money and How to Get Some,” find out how to get money to start a business.

You can purchase this book from the MOTHER EARTH NEWS store: Grow Your Handmade Business.

If you are considering getting a loan for your business, you have some options. Banks, grants, family members, angel investors, and community resources are all legitimate paths. As you decide who you want to approach, take note of what their requirements are for requesting money. Different institutions and different people may want different information from you.

How to Get Money to Start a Business: Bank Loans

Let’s start with banks since they’re the most common way to get money for any business. Banks are actually pretty easy to work with. I don’t mean it’s always easy to get money from them, but dealing with them is very straightforward. First of all, banks want to lend you money, and they are very clear about what you need to do to apply for a loan.

Make an appointment to speak with the loan officer at the bank where you have your business account. Show up prepared, knowing exactly what you want the bank to do for you. Do you want a loan for equipment like new ovens or industrial sewing machines, or do you need money to renovate your working space? Do you need a line of credit to buy whatever your business might require over the next two years? Be really clear about what you want the money for and why. Be prepared to talk about your business and to answer any questions that you think may come up. Make sure that you can expertly explain just what it is you do.

Bring a list of questions regarding applying for the loan, including how long the process can take because the time it takes for approval can vary greatly from bank to bank. You should walk out of this meeting knowing anything and everything that the bank will want from you when it comes time for them to make a decision about lending you money. In fact, ask for a loan application so that you can see what questions you’ll need to answer. And ask the loan officer if the bank has any local resources or organizations that they work with when it comes to lending money to small businesses. Once you have all this information, get to work applying for the loan.

John Henning
9/4/2013 8:52:46 AM

Hey folks, beware of any company that says they can help you get a government grant to start a business, I have been helping entrepreneurs start businesses for over 10 years and there are very very few grants available for starting a new business. Most government grants are only available for scientific or educational institutions. Direct from SBA site: "SBA does not provide grants for starting and expanding a business. Government grants are funded by tax dollars and require very stringent compliance and reporting measures." Here is the link: "If your small business is engaged in scientific research and development (R&D), you may qualify for federal grants under the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs." I am not saying you can't do it, I am just saying be careful what you pay for when it comes to grants.

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