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August 16, 2018

Beyond Basics

Fund Your Dream

Self-Financing • Loans • Targeted Funding • Opportunities • Venture Capital • Grants

| 4/21/2017


Bank loans are a common source of funding for small business, but obtaining one can be tough. To improve your odds, measure your current situation against the benchmarks bankers use and make necessary adjustments before sitting down with a loan officer.

Bankers want to know you can repay the money. As proof, bring a written analysis of anticipated cash flow and a description of any collateral that could be used as secondary repayment.

You may know your credit score, but have you actually read your credit report? Obtain a free copy at and review it for mistakes and potential “red flags.” A missed payment or period of bad credit won’t necessarily disqualify you from obtaining a loan; attaching a written explanation could help your case.

Equity can be built two ways: through retained earnings and by the injection of cash by owners/investors. Do not expect to obtain a loan covering 100% of your financing needs; you will need to add equity in your business by investing some money of your own.

Personal and business assets that can be sold to pay back the loan if necessary are defined as collateral. If you are just starting out and have none, you will likely need a co-signer who does.

Bankers do not look favorably on loan applicants seeking to open businesses for which they have no experience. If that describes you, then: (1) you must demonstrate your intention to hire people who know the business, or (2) take on a partner with appropriate experience. In either case, it would be wise to also get your own experience by working in the business and taking entrepreneurial training classes.


Tap into Targeted Funding Opportunities

If you are black, Hispanic, a female or a U.S. veteran, your business may be eligible for one of the following specialized funding programs:

The Black Business Loan Program provides loans, loan guarantees and/or investments through loan administrators to black business enterprises that cannot otherwise obtain capital through conventional lending institutions. For additional information, visit In addition, Black Business Investment Corporations throughout Florida stand ready to facilitate access to capital for black business owners. Hispanic business owners may find funding information pertinent to their needs through Prospera (formerly Hispanic Business Initiative Fund Florida) at

No government loan programs exist exclusively for women business owners; however, experience has shown that SBA loans are three to five times more likely to go to women than non-SBA loans. SBA financing options include 7(a) and CDC/504 loans as well as microloans for small-scale financing. On the local level, Women’s Business Centers can provide assistance in applying for loans and also may provide access to alternative capital financing programs.

The U.S. Department of Veterans Affairs Office of Small & Disadvantaged Business Utilization offers a wealth of information on small business financing specifically geared to veterans. Its Veteran Entrepreneur Portal provides easy access to federal services and best-practices information about starting, growing and funding a business. For more information, visit In addition, the SBA website features an entire section devoted to business resources for veteran entrepreneurs at


Seek Venture Capital

Venture capital firms and private individual investors called “angels” may be willing to make money available for your venture if they see potential. In return, they will likely expect some level of control in your business and/or a percentage of future profits.

Venture capital firms are often controlled by banks, insurance companies and large corporations; angels, on the other hand, are generally wealthy individuals looking to support “hot” ideas and untapped investment opportunities. In either case, be prepared to present a business plan that is heavy on “wow.” These types of investors will take risks, but only if they truly believe in you and/or your product or service.

Venture capitalists traditionally deal in large sums of money and seek better-than-average returns on their investments; less than 1% of proposals for venture capital are ever actually funded. Individual angels will make smaller investments in business startups, and although looking for good returns, they may be less demanding.

See a list of Florida venture capital firms or visit the Florida Venture Forum website ( for more information.

Tags: Florida Small Business, Beyond Basics

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