Incorporate a Business - click here to bookmark



Incorporate Your Business Corporation in Any State
Limited Liability Company (LLC) Formation.  Incorporate Your Business Online.
Non-Profit and Not for Profit Incorporations
Certificate of Authority / Good Standing
Certificate of Good Standing
Corporate Kits - Protect Your Business Investments with our Corporate Outfits Customized just for You

Notary Public Supplies - Notary Seals, Stamps, Record Journals, Notary Public Signs
Corporate Seals and Stamps.  Professionally Engraved and Customized for Your Business
Business Stationary, Business Cards, Company Letterhead...Quality Business Printing for Your Company
IRS forms to assist you with your Incorporation.  Download the Election by a Small Business Corporation (form 2553) and  Employer Identification Number (form  SS-4)
Incorporation Questions?  Corporate Concerns?  LLC Comments?  Contact Us!
About Us



Next Lesson
Incorporate your Business, LLC, Non-Profit or Corporation for just $99.95 plus state fees


One key to a successful business start-up and expansion is your ability to obtain and secure appropriate financing. Raising capital is the most basic of all business activities. But, as many new entrepreneurs quickly discover, raising capital may not be easy; in fact, it can be a complex and frustrating process. However, if you are informed and have planned effectively, raising money for your business will not be a painful experience. This discussion focuses on ways a small business can raise money and explains how to prepare a loan proposal. This information can also be found on the IRS website.


Finding the money you need
There are several sources to consider when looking for financing. It is important to explore all of these options before making a decision.

Personal saving: The primary source of capital for most new businesses comes from savings and other forms of personal resources. While credit cards are often used to finance business needs, there may be better options available, even for very small loans.
Friends and relatives: Many entrepreneurs look to private sources such as friends and family when starting out in a business venture. Often, money is loaned interest free or at a low interest rate, which can be beneficial when getting started.
Banks and credit unions: The most common sources of funding, banks and credit unions, will provide a loan if you can show that your business proposal is sound.
Venture capital firms: These firms help expanding companies grow in exchange for equity or partial ownership.
Borrowing money
It is often said that small business people have a difficult time borrowing money. This is not necessarily true. Banks make money by lending money. However, the inexperience of many small business owners in financial matters often prompts banks to deny loan requests. Requesting a loan when you are not properly prepared sends a signal to your lender. The message is that your loan would be a high-risk one.
To be successful in obtaining a loan, you must be prepared and organized. You must know exactly how much money you need, why you need it, and how you will pay it back. You must be able to convince your lender that you are a good credit risk.

SBA loan maturities
Loan programs from the Small Business Association (SBA) are generally intended to encourage longer term small business financing, but actual loan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed. However, maximum loan maturities have been established: 25 years for real estate; up to10 years for equipment (depending on the useful life of the equipment); and generally up to seven years for working capital. Short-term loans are also available through the SBA to help small businesses meet their short term and cyclical working capital needs.

Types of business loans
Terms of loans may vary from lender to lender, but there are two basic types of loans: Short-term and long-term.
Generally, a short-term loan has a maturity of up to one year. These include working-capital loans, accounts-receivable loans and lines of credit.
Long-term loans have maturities greater than one year but usually less than seven years. Real estate and equipment loans may have maturities of up to 25 years. Long-term loans are used for major business expenses such as purchasing real estate and facilities, construction, durable equipment, furniture and fixtures, vehicles, etc.

How to write a loan proposal
Approval of your loan request depends on how well you present yourself, your business, and your financial needs to a lender. Remember, lenders want to make loans, but they must make loans they know will be repaid. The best way to improve your chances of obtaining a loan is to prepare a written proposal.

A good loan proposal will contain the following key elements:

General Information
Business name, names of principals, Social Security number for each principal, and the business address.
Purpose of the loan - exactly what the loan will be used for and why it is needed.
Amount required - the exact amount you need to achieve your purpose.
Business Description
History and nature of the business - details of what kind of business it is, its age, number of employees and current business assets.
Ownership structure - details on your company's legal structure.
Management Profile - Develop a short statement on each principal in your business. Provide your:
Background
Education
Experience
Skills
Accomplishments
Market Information
Clearly define your company's products as well as your markets.
Identify your competition and explain how your business competes in the marketplace.
Profile your customers and explain how your business can satisfy their needs.
Financial Information
Financial statements balance sheets and income statements for the past three years. If you are starting out, provide a projected balance sheet and income statement.
Personal financial statements on yourself and other principal owners of the business.
Collateral you would be willing to pledge as security for the loan.

How your loan request will be reviewed
When reviewing a loan request, the lender is primarily concerned about repayment. To help determine this ability, many loan officers will order a copy of your business credit report from a credit-reporting agency. Therefore, you should work with these agencies to help them present an accurate picture of your business. Using the credit report and the information you have provided, the lending officer will consider the following issues:
Have you invested savings or personal equity in your business totaling at least 25 percent to 50 percent of the loan you are requesting? (Remember, a lender or investor will not finance 100 percent of your business.)
Do you have a sound record of credit worthiness as indicated by your credit report, work history and letters of recommendation? This is very important.
Do you have sufficient experience and training to operate a successful business?
Have you prepared a loan proposal and business plan that demonstrate your understanding of and commitment to the success of the business?
Does the business have sufficient cash flow to make the monthly payments?

This web site is secured using a GoDaddy Digital Certificate. This ensures that all information you send to us via the World Wide Web will be encrypted. Please click on the GoDaddy Authentic Site Seal which will verify the validity of our GoDaddy Certificate, and our commitment to your security." Read our Privacy Statement.