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Find a Way to Pay

Assuming you’ve assessed your readiness, and have begun putting plans on paper, you’re probably feeling pretty good about this whole business ownership “thing” right about now. Hate to burst your bubble, but it’s time to face the elephant in this room: MONEY. You need to ask yourself — and the sooner, the better — “How am I going to pay for this?”

Here are seven possible options:

Use your own money

Before you consider borrowing the money to launch your business, take a hard look at your personal financial assets. Can you withdraw funds from your savings account? Cash out your stocks? Downsize your standard of living? Sell that luxury SUV? If these are not viable options, consider your credit cards. Many a small business has managed to stay afloat by charging its way through a first year or two of operation, but it’s risky. If you go this route, use only cards with favorable interest rates (look for cash-back bonuses too!), always read the fine print before you commit and make every payment on time.

Apply for a commercial loan

Commercial loans, whether from private or public sources, are generally approved based on the borrower’s capacity to repay as determined by past business experience, personal credit rating and collateral. For a first-time business owner with little or no credit history, securing a bank loan can be tough – though not impossible – and a well-crafted business plan could make all the difference. If you can present a strong case for your firm’s potential profitability, your written plan just might sway a skeptical loan officer.

Potential sources of commercial loans for small businesses include:

  • Commercial Banks, which might be less than enthusiastic about financing business startups these days due to the high rate of small business failures associated with the pandemic, are still worth pursuing. Many of the biggest names in banking – Wells Fargo, Chase, Capital One, Bank of America, Citibank, etc. – have entire divisions devoted to small business lending and may offer convenient online banking options. Types of funding and terms vary from bank to bank. Browse internet sites for broad details, then make an appointment to meet with a loan officer at a nearby local branch to discuss specifics.
  • Credit Unions offer many of the same services as banks, including small business loans and online banking options, but as nonprofit institutions, they tend to put greater emphasis on personal service and feature higher interest rates on deposits and lower rates on loans.
  • Commercial Finance Companies are often willing to take higher risks than banks, but they commonly charge higher interest rates. As a rule, these firms tend to evaluate loan applications more on strength of collateral than track record or profit potential.
  • Digital Banking Platforms typically provide many of the same services as traditional commercial banks and credit unions, but with this difference: All transactions are digital; no brick-and-mortar visits are required. Freelancers working from home or in shared workspaces may find this platform’s emphasis on convenience and flexibility particularly appealing.

Know the Score
As a first-time entrepreneur, you have no business credit history, so lenders and suppliers will look at your personal credit record to determine eligibility for financing.
To avoid an embarrassing surprise, know your credit scores before you apply for a loan. Visit annualcreditreport.com to find your scores from all three nationwide consumer credit reporting companies. It’s free.

Tap into public sector programs.

The U.S. Small Business Administration (SBA) does not lend money directly to small business owners, but it does set guidelines for loans made by its partnering lenders, community development organizations and micro-lending institutions. SBA-guaranteed loans generally have rates and fees comparable to non-guaranteed loans and typically feature lower down payments, flexible overhead requirements and, in some cases, no collateral requirements. In addition, some SBA-guaranteed loans come with continued support to help recipients start and run their businesses.

Applications for SBA loans are treated like any other commercial loan application: Demonstrated ability to pay the money back is the primary consideration for acceptance, and the decision to approve/disapprove an application rests with the lending institution, not with SBA.

Florida-Based Financial Support Programs facilitated by Enterprise Florida Inc. (EFI) to match qualifying small businesses with lenders that can provide financial assistance and lines of credit include:

  • Small Business Loan Support Program Consisting of EFI’s State Small Business Credit Initiative (SSBCI) and Microfinance Guarantee programs, the Small Business Loan Support Program helps small businesses obtain loan approvals and leverage private capital for use in startup costs, working capital, business procurement, franchise fees, equipment, inventory or the purchase of owner-occupied commercial real estate. The program provides necessary security, in the form of a partial guarantee, so the lender may comfortably approve a loan or line of credit.
  • Venture Capital Program The EFI-sponsored Florida Opportunity Fund provides venture capital for startup and early-stage businesses. State Venture Capital Programs typically take one of two forms: a state-run venture capital fund (which may include other private investors) that invests directly in businesses; or a fund of funds that invests in other venture capital funds which, in turn, invest in individual businesses. Factors such as resources and available talent help determine the appropriate vehicle.

For additional information on these programs, visit enterpriseflorida.com/small-business/

Find SBA Lenders
Lender Match is a free online referral tool that connects small businesses with participating SBA-approved lenders. For information visit: sba.gov/funding-programs/loans


Attract a private investor.

Venture capital firms or private individuals called “angels” may be willing to invest in your business if they see high potential. Venture capital firms are typically controlled by banks, insurance companies and large corporations; angels, on the other hand, are usually wealthy individuals looking to support “hot” ideas and untapped investment opportunities. In return for backing your business, either entity will expect some level of control and/or a percentage of future profits. Since these types of investors typically take risks only on people and products they truly believe in, you will need to approach them with uber-confidence and a written business plan that is heavy on “wow.”

See list of Florida venture capital firms or visit Venture Forum for more information.


Seek targeted financing.

Your unique race, ethnicity, gender and/or military service may open doors to targeted funding and educational opportunities.

If you are Black, Hispanic or female, your business may be eligible for targeted financing:

The Black Business Loan program, which provides loans, loan guarantees and/or investments through loan administrators to Black business enterprises that cannot otherwise obtain capital through conventional lending institutions. In addition, Black Business Investment Corporations throughout Florida stand ready to facilitate access to capital for Black business owners.

Likewise, Hispanic business owners can find funding information and other business resources pertinent to their specific needs through Prospera. This nonprofit economic development organization provides bilingual assistance to entrepreneurs seeking to access capital in the form of traditional bank loans as well as SBA and micro-loans.

And while no government loan programs exist exclusively for women business owners, recent history shows that SBA loans are three to five times more likely to go to women than non-SBA-guaranteed loans. On the local level, Women’s Business Centers help in applying for loans and may provide access to alternative capital financing programs.


Obtain a grant.

Almost no federal grant money is available to launch for-profit small businesses. However, some businesses engaged in scientific R&D may qualify for federal grants under the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs if their projects meet federal objectives and have a high potential for commercialization. For details, visit SBIR.gov. For information about grants available through state and local programs and nonprofit organizations in Florida, visit floridagrantwatch.com.

Active duty and veteran military men and women can look to SBA for information regarding programs and services aimed at helping them start and run small businesses. Among these opportunities are “Boots to Business,” a two-day intensive course in business ownership fundamentals for active service members as well as for veterans, National Guard and Reserve members and their spouses; and a wide range of training, counseling and mentoring services available through SBA’s nationwide network of Veterans Business Outreach Centers (VBOCs).

In addition, two comprehensive SBA loan programs are available to vets: The Veterans Advantage Loan Program provides up to $5 million for businesses at least 51% owned and controlled by veterans; and the Military Reservist Economic Injury Disaster Loan of up to $2 million to help cover operating costs while a veteran is on active duty.


Give crowdfunding a try.

way to launch a business by getting a bunch of people you may or may not know to donate the startup money online. If you decide to go this route, you can either create and manage your own crowdfunding site or use an existing crowdfunding platform such as Kickstarter, GoFundMe or iFundWomen. There are pros and cons to either option, and the SEC has rules and procedures for soliciting “shareholders” online. If crowdfunding appeals to you, look to the specialists at your local Florida SBDC office for advice and do your homework before signing on to anything.

COVID-19: Continuing to Speed Recovery

On March 24, 2021, SBA announced plans to more than triple the maximum amount small businesses and nonprofit organizations can borrow through its Economic Injury Disaster Loan (EIDL) program. Beginning the week of April 6, the maximum loan limit of $150,000 shot up to $500,000, and the program itself from six months of economic injury to a maximum of 24 months. New loans are automatically being considered for the higher cap; businesses that received a smaller loan under the previous conditions are being contacted by SBA with regard to additional paperwork as needed. Funds made available through EIDL do not have to be repaid.