Potential Sources of Money to Start or Expand Your Small Business
This chapter helps your writing process because it gives you an idea of what lenders and investors want to see in a finished plan. Your ability to understand your financiers’ motives can mean the difference between getting a loan or investment and coming up empty-handed. If you already have financial backing, you can skip this chapter.
Many people and institutions are looking for sound loans and investments. From their side of the fence, it can often seem extremely difficult to find a good one. Many potential financiers have been frightened by news stories about small business financial problems, con artists selling phony tax shelters, business bankruptcies, and so on.
What does this mean to you? Simply that you must both create a sound business plan and present it, and yourself, in a way that appeals to lenders’ and investors’ needs for security and profit. If you have a good business idea and are patient and persevering, you should be able to find financing. It was Calvin Coolidge who, sometime in the 1920s, said, “The business of America is business.” It’s no less true today.
While these basic concepts are simple, not everyone seems to clearly understand them. For example, some people put a great deal of energy into arranging to borrow money, but think little about the hard work that goes into repaying it. The important thing to understand is that the lender expects you to pay the money back. It’s only fair that you honor your promise if you possibly can