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    5 Replies Latest reply on May 29, 2009 5:31 AM by Darcom

    Are there any loans for startup tech company?

    Darcom Newbie
      This market is tough for everyone, but it seems to be exceptionally tougher for people like us who have startup technology/software companies.

      We have spent just about the last 5 years designing and developing our products and services. The business is fully operational, but what we need now is working capital for things such as marketing, equipment, location, etc.,basically, normal business items needed for day to day operations. We also have several patents pending which will protect the technologies we've created. We have over $500K of computer hardware and software that we've purchased, as well as collateral for a loan if necessary.

      The industry we are in is on the verge of not only taking off nationally, but globally.

      If anyone can point us in the right direction for an SBA loan with a lender that is not only startup friendly, but also tech friendly, it would be greatly appreciated. We are asking for $542K.
        • Re: Are there any loans for startup tech company?
          phanio Pioneer
          You have several options for your start-up.

          First, if you are seeking a SBA loan - your best bet is to contact all the local banks in your area. These financial insititutions are more friendly to start-ups and should know your market.

          Second, you may have to seek a combination of loans for the amount you are seeking and be creative in doing so. If you own your equipment outright - you could try selling it to an equipment loan or lease company - receive cash for the equipment - then purchase (on terms) or lease the equipment back with a buyout option. This would only be a paper transaction you would not have to take your equipment to the company. This would probably provide you with the best rates and terms.

          If you are seeking additional equipment - bypass the banks who do not like start-ups and find a lender that specailizes in equipment. These lenders only deal in equipment and understand this market - plus, they want to work with start-ups.

          For working capital - you can seek unsecured loans that can provide you some of what you are seeking - there are many sources depending on the amount you need. If you have completed a cash budget, you may find that you do not need $542K in cash right now but will need that over time. Thus, if you can get all of those fund in one lump, you might try getting what you need for the next few months - once that is taken care of - start finding capital for the next few months - (I know this is not the optimal way to raise funds but if you cannot get a single lump sum - this may be your only way).

          If you have other business assets like accounts receivables or purchase order - you can factor these as well for working capital - you get better rates and terms.

          A combination of loans may be your only option as very few lenders will provide that amount of capital to a start-up.

          Lastly, why $542K? Can this amount be reduced through cost management until your business picks up its revenue?

          Business Money Today

          • Re: Are there any loans for startup tech company?
            LUCKIEST Guide
            Are there any loans for startup tech company??

            Welcome Darcy, YES there are. You got a great answer from "phanio" He and I both want to know how you came up with $542K ??

            Have you developed a Business and Marketing Plan yet?? It is one of the first items a lender or investor will want to read.

            Good luck, LUCKIEST