How to finance a small business quickly?

[mourmar]

Hello everybody, I just found out about your blog. I took the time to read many previous dialogues which were useful to me. However I have a specific question. How can a foreigner get a little financial help to start his own small business in the US ? I'm not talking for fundraising site widgets and long-term solutions but a more quick and substantial financing. Not being a US citizen, I'm not familiar with how businesse are moving. If anybody knows something, a site or organization etc, I 'd be very happy to hear. Thank you and take care.

[Business Attorney]

Mourmar, welcome to the forum. Unfortunately, "quick and substantial financing" is almost always mutually exclusive unless you have a very rich uncle. Financing any small business is very difficult and usually starts with friends and family. Friends and family are willing to bet on that the person they know will be able to get the business off the ground and will feel pressure not to lose the money entrusted to him or her by the friends and family. They are also often willing to accept a return that is really not commensurate with the risk that they are taking.

One drawback is that the friends and family investment is usually in small increments on an as-needed basis as the small business grows. Unless you really have that rich uncle (or parent, brother or friend), the source of capital is fairly limited.

In order to get a more substantial investment, it generally takes longer and is more involved. It often also requires at least some "proof of concept" that the business is in fact one that is likely to be successful. The investor in this case is going to want a return on his investment that reflects the fact that an average start-up is very likely, taking down his entire investment in the process. There is generally no expectation that the founder of the small business is going to go to extremes to ensure that the outside investor gets paid, which further increases the risk to the investor. All those things make it very tough to locate an appropriate investor, sell him on the investment and close the funding. It is done all the time, but it is a lot of hard work and many people are unable to get all the pieces in place.

There are sites like Kickstarter that offer creative funding techniques, though usually for small amounts. In addition, recent changes to the U.S. securities laws make it likely that there will be other more simplified ways to raise capital for small companies in the near future. However, for now those are not available.

[websonalized]

Perhaps you are interested in in researching sba.org loans and grants. I am not familiar et all with the process, but I receive their weekly newsletter, and I often read headlines of events that deal with this topic: Loans & Grants | SBA.gov (http://www.sba.gov/category/navigation-structure/loans-grants/)

[Harold Mansfield]

Unfortunately what you are looking for doesn't exist. I'm not sure if there are any programs for you personally. There may be, but it'd be doubtful.

Not being a citizen is not necessarily a bad thing, as long as you are legal. If you are not legal, then you pretty much have no hope of qualifying for anything or getting any help from anyone in the business world unless you have a fabulous product, or patent.

But don't feel bad, there's nothing for us either. Most of us started our businesses with our own money, credit cards, loans from family and so on. Banks only give business loans if you have collateral or something to leverage. They don't lend on good ideas and personality.

Private investors is a possibility for anyone, but tech is where most of that money is going.

You may try looking for grant programs from civic or private organizations, but in all honesty even if you find such a program or opportunity, you will need to do as much as you can on your own, with what ever money you have to prove to anyone that you are worth the time or risk.

[stalla]

There are many ways to finance your small business quickly. It's all depending on individual funding ranging from grants, bank loans and personal loans or venture capital can be obtained. Bank loans are desirable for those who have already started their businesses and are already working. Venture capital is also very simple method to finance a business. Also you can find some government and nongovernmental institute. Each governmental and non governmental institute can provide grants to change people finance their small businesses. The amount is not huge, but can be of a excellent help particularly when there is a want to put the business running.

[browndirt3]

Everyone is correct, there is no sure fire way of financing a small business over night; rich uncle of course. Without personal guaranteeing the funds or using your personal savings or mutual funding accounts, there are a few options to assist you that are on the internet.

The two sites listed below basically states the same information on how to start and fund your business

Home - (424) 281-4830 Biz Credit HotLine (http://bpcreditdotnet.webs.com) and
GBOOGIE.NET - Home (http://gboogie.net)

I've gained a lot of information from these sites and have started to build credit in the business name and not having to put my ss# on the application. It starts small, but you have to start from somewhere. Just the other day, I received my latest card for $1500 from Sears Commercial One. I know a lot of folks are looking for straight up cash, but at least I will able to purchase items from several venders to cut operational costs.

[MJKBIZ]

Hi,

I believe that it will take time to come up with the finances for your business. You may have to use your savings, apply for a business loan, partner up with someone that could help you finance your business etc. I suggest you do your research find out about the different banks and credit unions that offer business loans, see which back has the least interest and go apply for a loan. When you apply you may have to tell the banker about your business ideas and how you plan to organize your business.

I hope you find this helpful!

<please set up a signature through Settings>

[AccountantSalary]

I was also going to suggest Kickstarter -- you didn't state where you were, but it does allow UK as well as US accounts.

[SocMediaMaven]

I work for a factoring Company. If you are a start up and cant obtain traditional finance factoring (too new, bad credit etc) is one way you can go if you are doing business to business sales and have credit worthy customers.

Hi Marquez's, I'm interested in leaning more about this. Can you please elaborate on what factoring is and the pros and cons? Or, perhaps where we can go to find more info?

[grifballs]

crowdfunding is a quick and easy way to test your product as well as get marketing exposure!

[Blue Hen]

crowdfunding is a quick and easy way to test your product as well as get marketing exposure!

Yes, but you can't get exposure without actually marketing it yourself. Plenty of people post a project on kickstarter or another platform and get little or no response. As the entrepreneur, you have to rally people to your project. This can be done by asking your friends and family to "kickstart" your fund raising campaign so that it doesn't sit at zero. Then you need to leverage your contacts on social media, and not just by posting a link to your campaign but my making a passionate case for what you want to create or do.

If you can't get these people interested in an investment in your product, how are you going to sell it to them once it's done? So in a sense it is a "test" like grifballs mentioned, but mostly to the extent that you can see how well you can market it to others, not just to see how well others respond to it.

[Amir Khan]

I see original posting on this thread is pretty old, however this is a topic with lots of interest.

As a small business owner I've found one of the hardest thing is to find/line-up finances for start up small businesses. Unless you are a high net worth person, most banks and financial institutions will not bother looking at your application. So how do you find financing?

Here are top 4 ways to finance your small business:

1. Self finance/bootstrap
2. Ask family and friends for loans
3. Bring partners in with cash (willing to dilute ownership)
4. Find investors (willing to give up equity)

In United States, there are now micro financing available for small businesses that do not qualify for traditional bank loans. In any case, you should not expect anyone or any institute to loan you money if you do not have the ability to pay back the loan.

[Hannah1]

Just noticed this thread some interesting points.. as long as you've done enough research and read reviews business loans are definitely a great way to invest in the future of your company. Ultimately you want to be successful and this is one way to push you in the right direction

[phanio]

The quickest way to get quick financing for your small business is to work that business until it cash flows a ton of money - almost to the point that you don't need a business loan. Then banks and lenders will start chasing you. Banks and other lenders just want to get repaid and if you cannot demonstrate that ability - based on past results - then you don't have a chance. The only other option to quickly finance a small business is to self-fund any and every way that you can. Thus, if you are the one putting the money in - then you won't have to deal with all the underwriting and approve hassles.

[indycine]

I agree - the business must pay for itself, and working it really hard results in more cash - to the point you often don't need Crowdfunding or Loans! That is really the way to go, if you have an established customer list, just do the time-honored thing, and make a special offer for your customers, and promote it as a "Special Sale." This is good for cash emergencies, and can be used to expand or otherwise promote the business.

Otherwise, you're looking for a new Partner or an Investor, to convince that your business has the prospect of success, at least enough to repay a loan or yield as equity. Your Investor will want a return on his investment which is both lucrative and profitable.

I am looking forward to see long-rumored new changes in the U.S. securities laws, to simplify raising capital for small companies, soon. Then we'll see how this plays out.

[will.i.earn]

Hence the old adage "loans are for people who don't need them".

[McKissick]

crowdfunding is a quick and easy way to test your product as well as get marketing exposure!

I agree, crowd funding now a days is a new way of raising funds for your business or you can apply the old method of taking loan on the basis of your good credit score.

[smallbizfinancier]

Are you currently living in the States, or are you planning to move to the USA by making an investment in order to get a VISA?