Startup Capital For Small Businesses

Government s by the Small Busness Admnstraton are one of the most valuable
sources of
startup capital
for small busness entrepreneurs.

Snce ts ncepton n 193, the SBA h provded
startup capital
for several thousand
small busnesses. n fa, SBA h fnanced more than 219,000 busness owners wth
s of more than $ 4 bllon. The role of the SBA n provdng startup captal
to small companes h ncreed n the lt decade. n the pt 10 years, SBA h
provded
startup capital
for almost 43,000 small busnesses wth more than $94.6
bllon n s. SBA s probably a leadng source of fundng for small busnesses.
However, before roachng the SBA for startup captal, entrepreneurs need to estmate
how much they need for ther busness. Every busness s dfferent, and h ts
own specfc ch needs at dfferent . Some busnesses can
be started on a shoestrng , whle others may requre consderable
investment

n nventory or equpment. t s vtally mportant for entrepreneurs to estmate
how much startup captal they need.

A realstc for startup captal should nclude those thngs that are necessary
to start that busness. These essental
startup capital
expenses can be dvded
nto two separate categores: fxed and varable. Fxed expenses nclude rent, utltes,
admnstratve costs, and nsurance costs. Varable expenses nclude nventory,
shppng and agng costs, sales commssons, and other costs socated wth
the dre sale of a produ or servce.

The most effeve way to calculate the expense for startup captal s by mantanng
a worksheet that lsts all the varous categores of costs. The advantage of lyng
to the SBA for
startup capital
s that t s more flexble than other s offered
by tradtonal lendng nsttutons such banks.


Entrepreneurs
lyng to the SBA for startup captal need to meet some mnmum
crtera. Busness owners wll need to furnsh detals of busness profle,
request amount, collateral detals, busness fnancal statements and al fnancal
statements.

Most analysts suggest that
entrepreneurs
should get pre-qualfed for the startup
captal. Pre qualfed fnancng uses ntermedary organzatons to sst prospeve
borrowers n developng vable lcaton ages and securng s.

The SBA s one of the most promsng sources of startup captal for small busness
entrepreneurs. Busness owners should thnk of t before venture capitalists and
angel nvestors when seekng startup captal.

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