Get your business funded

© 2012 CAPBuilder Network Group All rights reserved
GET YOUR BUSINESS FUNDED

Marc Parham, Radio Show Host, MC/Speaker, Infopreneur
2

BEFORE YOU LOOK FOR
FUNDING

Determining Your Financing Needs
•Do you need more capital or can you
manage existing cash flow more
effectively?
•How do you define your need?
• Do you need money to expand or as a cushion against risk?
• How urgent is your need?
• You can obtain the best terms when you anticipate your
needs rather than looking for money under pressure.

Determining Your Financing
Needs
•How strong is your management team?
• Management is an important element assessed by
lenders.
•How does your need for financing mesh with your
business plan?
• If you don't have a business plan, make writing one
your first priority. All capital sources will want to see
your business plan for the start-up and growth of your
business.

SOURCES OF FUNDING

SOURCES OF FUNDING
• Micro-Lenders ($500-$50,000)
• Banks ($50,000 - $250,000, $$$)
• SBA ($50,000 - $250,000, $$$)
• Family and Friends ($$$$)
• CROWD FUNDING
• Private/Angle Investors ($$$$)
• Venture Capital ($$$$)
• Retirement funds

Micro lenders
•Microloans are small loans
(typically, in the range of $5,000
to $25,000)
•Many micro lenders are non-
profits
•In the U.S., microloans generally
carry higher interest rates
•There are 5 sba backed lenders
in ga

Micro lenders
• Albany Community Together
• ACE Loans
• Atlanta MicroFund
• DeKalb Revolving Loan Fund
• Small Business Assistance Corporation

Small Business
Administration loan
• offers two types of loans that can help
entrepreneurs get the capital they need to start their
business:
• the 7(a) guarantee small business loan
• Purchasing a business or working capital
• the 504 fixed-asset small business finance program.
• Commercial real estate or heavy
machinery/equipment

Friends and family
• If you have a friend or relative with
some spare cash, you have another
potential way to finance your
business.
• Borrowing from friends and
family presents an interesting
alternative to traditional forms of
financing

Angel investors
•Generally occurs in a
company's early stages of growth,
with investors expecting a 20 to 25
percent return on their investment.
•They can provide tactical benefit to
the company they are investing in.

Venture capitalists
• For small businesses that are
beyond the startup phase and
already have revenues coming in
• Venture capitalists focus on specific
industries,
• Venture capitalists have a short
leash and often look to recover their
investment within a three- to five-
year time window.

Crowdfunding
• Crowdfunding on websites like Kickstarter,
Indiegogo and others that are geared more toward
businesses
• These sites allow businesses to pool small
investments from a number of investors instead of
forcing companies to look for a single investment.
• businesses are able to raise money without giving
up an equity stake in their business.
• raise money in exchange for rewards or products.
Other sites have an equity-based model in which
businesses do give up a bit of their share.

Types of funding

Types of Financing
• There are two types of financing:
• equity financing and debt financing.
• When looking for money, you must consider your company's
debt-to-equity ratio—the relation between dollars you've
borrowed and dollars you've invested in your business.
• The more money owners have invested in their business, the
easier it is to attract financing.

Equity Financing
• Equity financing (or equity capital) is money raised by a
company in exchange for a share of ownership in the
business.
• Ownership is represented by owning shares of stock
outright or having the right to convert other financial
instruments into stock.
• Equity financing allows a business to obtain funds
without incurring debt, or without having to repay a
specific amount of money at a particular time.

Debt Financing
• Debt financing means borrowing money that must be
repaid over a period of time, usually with interest.
• Debt financing can be either short-term, with full
repayment due in less than one year, or long-term, with
repayment due over a period greater than one year.
• The lender does not gain an ownership interest in the
business, and debt obligations are typically limited to
repaying the loan with interest.

Ability to Repay
•The ability (or capacity) to repay the funds you
receive from a lender must be justified in your
loan package.
•Banks want to see two sources of repayment—
cash flow from the business as well as a
secondary source such as collateral.
•The lender reviews the past financial statements
of a business to analyze its cash flow.

Credit History
• When a small business requests a loan, one of
the first things a lender looks at is personal and
business credit history.
• So before you even start the process of preparing
a loan request, you want to make sure your credit
is good.

Collateral
• When a financial institution gives a loan, it wants to make sure it will
get its money back.
• That’s why a lender usually requires a second source of repayment,
called collateral—personal and business assets that can be sold in
case the cash generated by the small business isn’t sufficient to
repay the loan.
• Every loan program requires at least some collateral.

Steps To funding Your Business
1. Write A Business Plan
2. Determine Funding Need
3. Research Available Funding
Options
4. Setup Initial Meeting To Discuss
5. Complete Loan Application
Process

SUMMARY
•Know what you want the money for
•Make sure you can pay it back
•Get the right type of money for your
business
•Have the right documents
•And yes…Have a plan!

Get your business funded

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