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Financing a Home Business With a Microloan
By Dustin Heath
When you are financing a home business, there are a few options to consider and the
Small Business Association is one place that should not be overlooked. There are several
ways to finance your new home business such as getting a loan from your local bank, taking
out a loan from your 401k or retirement savings or applying for a microloan from the SBA.
The Small Business Association, which is sometimes referred to as the SBA, is an
excellent source for small business advice and resources, providing an array of
information for entrepreneurship. The SBA makes resources available to community lenders
or intermediaries that make these types of loans to borrowers for small business start ups
and newly established businesses.
One of the most popular programs is the microloan program. The maximum amount is $35,000,
although, most of the loans are quite a bit less than that with the average being around
$13,000. Everything is done locally and without discrimination, so it could be an excellent
option when financing a home business.
Documents that you will need:
Business and personal financial statements will be necessary to apply for a microloan
for financing a home business. All owners and partners that own at least 20% of the
business are required to provide the last three years of personal financial documents, as
well as current statements. Also, you will need copies of your tax returns and current
business statements, if you have them. Include
A business profile will be needed to describe what type of business it is, length of
time that the business has been operating, number of employees that you have and the
figures of your annual sales. Create your own business profile as accurately as possible;
it will be one of the most important things to provide, along with the financial
records.
Lastly, you will need to describe your loan request. Type up a document that tells
exactly what your business will be using the funds for and the loan amount that you are
requesting. Be as detailed as possible; do not just say that it will be used for financing
a home business. You may be asked if you have any collateral to secure financing, like any
business equity or available cash.
Once you have all of your necessary documents in order and your business plan is
complete, it will be time for you to call the bank to start your application. You might
want an expert to glance over your business plans and documents for accuracy. There is an
additional resource that the Small Business Association has available for business advice.
It is called SCORE and it is an acronym that stands for Service Corps of Retired Executives.
These are professional business people that have been in your shoes and know how to
advise small businesses for success. There is also another place where you can get
counseling on a one-on-one basis and it is called the SBDC, which stands for Small
Business Development Centers. You can find the information for both of these through the
SBA website or by asking your local chapter.
Dustin Heath recommends that you visit
Home Business Ideas and Opportunities
to learn how you can start your own home-based business earning multiple streams of income with a
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