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Best online resource for low-interest loans, venture capital?
What is the best online resource for low-interest loans, venture capital, or any other funds that are offered by federal/state government agencies? Before approaching my bank or a private firm, I'd like to explore ways to raise funds for my small business via financial backing from government sources. Where do I even start?
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2 Answers
The above information is quite useful but not the complete answer. Please keep in mind that any money you raise either through the SBA or otherwise from a bank will require personal guarantees. If you are not worth much, you will not be able to borrow much. If you lose the money, you may lose personal assets as well.
Many Silicon Valley businesses are started with friends and family financing, so I suggest starting there first. You may be able to get started in a small way with F&F loans or equity. With some accomplishment on your part, it will be easier to get institutions to loan you money.
In the end, you may be too undercapitalized to be successful in your endeavor. So you might want to wait until you have more personal resources before trying to start your business. One of the main reasons for business failure is undercapitalization for the long periods needed to create your products and capture customers. From personal experience, I can say that this is always longer than expected.
Finally, if you are creating a technology or Internet product, you might find interest in the VC community, particularly if you are near one of the centers of such investing such as California or Boston area. Retail and consumer plans are less interesting to most VC's due to the lack of differentiation and competitor insulation that technology and patents supply.
Ralph,
It depends on what your needs are for your business. I would suggest going to http://www.sba.gov first. They are in the middle of re-working the website, but all the information will be there. Your best bet would be to investigate the 504 loan and the 7(a) loan. I am helping a client with an SBA loan at the moment. It does not appear to be that difficult. SBA will probably give you the best terms available, but you need to have your ducks in a row. Have your complete business plan, your personal financials, and two or three years past tax returns handy. If I can help, let me know. Good luck!
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