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    2 Replies Latest reply on Oct 17, 2009 6:09 AM by JasonTees

    Need advice on financing for promising new business

    BCEagle7 Newbie

      I am looking for advice on the most likely way to get the financing I need for a new small business. The business is a startup dog daycare and indoor park that will be located in a high-traffic area that accommodates easy access for both commuters and customers from nearby retail locations. I have a very solid business plan and have put a lot of work into the financial planning. I have a Finance and Marketing background and feel confident that I can make this business successful. I am able to put up about $25K of the startup costs, but I am looking for an additional $50-75K to cover startup and initial working capital. I am young and have good credit, but not a significant amount of collateral ( I do not own a house or other major assets).

      I am looking for advice on either pursuing a small business loan or finding potential investors (the amount of money I am seeking seems to small to gain the interest of many investors). What is the best way for me to go about getting financing? Are there ways I can compensate for my lack of collateral if I go for a bank loan?

        • Re: Need advice on financing for promising new business
          phanio Pioneer
          There are several SBA loan guarantee programs that would fit your business - especailly since you have a good 1/3 to 1/2 of your own equity to put in. Call around to local banks and see who is offering these programs - get their package, complete it and see what happens.

          There are also other ways - non-bank ways. If you need equipment - look for a non-bank equipment lender that works with start-ups - this could get you the equipment you need and reduce the overall amount you are seeking from a bank.

          There are micro-loan programs that can provide up to $35K for start-up companies as well as peer-to-peer social lending networks that can provide up to $25K for any purpose.

          There are also non-bank lending companies that provide up to $125K in personal or business loans.

          Many options - you just have to start chasing them down!

          Business Money Today

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          • Re: Need advice on financing for promising new business
            JasonTees Wayfarer
            The investor route will be difficult, mostly because investors are looking for high returns on their investments in a short period of time. Typically, investors want a unique idea or concept, and they will want to invest with someone that has a track record of entreprenurial success. Not to say that you won't succeed with your venuture, but it's more likely that you'll need to finance it some other way than investors.

            Bank financing for startups these days is far and few between. Like millions of entrepreneuers before you, you are going to need to scratch and claw your way to financing. Credit cards, friends, partners, peer-to-peer lending sites are all ways to raise funds. Keep in mind that many of these options can be quite expensive, including high rates and fees.

            The last bit of advice I'd have is to over estimate how much you'll need to get started. Many businesses underestimate how long it will take for their concept to gain traction, and end up running out of money before the business has sustainable cash flow. I've seen people start franshises for $500,000, and close their doors within 6 months because they ran out of working capital.

            I do love your concept, and wish you luck with it. I love dogs and have dreamed of a doggy daycare/boarding/grooming/training facility too. Best of luck!