Conventional Small Business Loans
To get conventional small business loans, the business owner or CEO must have the funding department submit lots of information for the bank. Having to have a credit check, give lots of personal information, banking information, recommendations from others in the business, and an established track record with a business accounting record, balance sheet, cash flow statement, accounts receivable, accounts payable, and an earnings statement. There is also the very important document that is called a business plan. This is a document that can be written out in the format of a research paper or and RFP. The more details about the current products that are developed and are selling with a positive cash flow, the better. In the business plan, the mission statement is given with all the financials.
Often it will shore up the chances of receiving lower interest rates with a feasibility statement or copy of the Request for Proposal that has successfully been submitted with funding on the way. If other funding sources are already established, conventional business loans are much more likely to be approved. Small business loans are often only available if at least $100,000 of accounts receivable are already established as well as accounts payable. The accurate income statement is a key factor in this process.
Venture Capital and Angel Money
Another way to acquire funding for a small business that is already established and has clients and income is the venture capital and angel investor resources. Entrepreneur can acquire at least one million dollars in funding this way. When a venture capitalist or an angel money source takes interest a score is acquired and the higher the score, the greater the amount of funds that will be pledged by the funding source. As the business grows the funding resource, who starts out as a partner will receive a percentage of the business interest in return for the funding granted and after some time will be paid off by the successful business
Attracting Angel money is all about being a business that can be protected as intellectual property from lawsuits that are often part of the entire endeavor of a growing small business. Intellectual property rights are important to establish with the assistance of trademarks and patents. The small business must find a good patent law firm to set up the provisional and the final patent that is legally sound so that the business will not be an easy target for lawsuits from hostile companies that are in direct competition for the same type of intellectual property. The most common types of small businesses that are funded by venture capitalists and angel money resources are information technology, high-tech firms and the latest trends in telecommunications and enterprise software development.