3.
Re: Financing a Small Business Mar 2, 2009 10:12 PM
Hi Miss Biz - In a nutshell, getting bank financing on your own will be extremely difficult. Without any prior experience or money to put in, it won't really matter how detailed or well thought out your business plan is.
Before this current economic crisis, your chances would have been slim, but there were lenders that could at least consider the thought of working with you. But in today's environment I regret to tell you that you that lenders have retreated to real estate secured, large capital injection deals, with very few exceptions.
If having this business is something you truly want to pursue, here's what I'd suggest: Start out by working out for someone else who owns the exact type of business you want to run, as banks are looking for 2-3 years of experience in the exact business you want to own. Second, you will need to start saving, as you'll need to have 20-30% cash to put into the store. So if the total project is $100,000, you can expect a maximum loan for $70,000-$80,0000.
Writing a business plan can be a good exercise, but in your case it won't be the difference between getting a loan and being declined.
I hope you don't take my comments as negative, but it's the reality of small business finance.
