No vision can become reality without adequate financing. And there is no one-size-fits-all solution to financing. Here are some good resources to determine how to finance your business venture.
Some sources to consider:
- Personal Savings: The primary source of capital for most new businesses comes from savings and other personal resources. While credit cards are often used to finance business needs, there are usually 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.
- Angel Investors And Venture Capital firms: These individuals and firms help expanding companies grow in exchange for equity or partial ownership.
Preparing your Pitch
Before approaching a funding source to pitch your project, you need a well thought out plan.
- Small Business Administration - General Financing and Accounting, and Loan and Funding Information
- SBA Startup Finance - Learn the differences between Debt Capital, Equity Capital and Venture Capital.
- SBA Loan Programs - Banks and other lending institutions offer a number of SBA guaranteed loan programs to assist small businesses. While SBA itself does not make loans, it does guarantee loans made to small businesses by private and other institutions.
- Nashville Capital Network - A collaborative initiative of Vanderbilt University, Nashville Technology Council, Nashville Health Care Council, and local investors, as well as local business and professional leaders. NCN strives to promote entrepreneurial education and economic growth by being the hub for early stage capital formation in middle Tennessee and to provide entrepreneurs with a more effective and efficient means to gain access to early-stage capital.
- Angel Capital Association - The trade association of leading angel investment groups in North America. Information on Angel Investing and how to find an Angel Investor
- Angel Capital Group - An Angel network of investors located in Tennessee that provides assistance in finding angel investors for entrepreneurs.
- TNInvestco Program - State of Tennessee initiative created to provide small businesses with the capital needed to bring new ideas to the broader marketplace and create jobs in the process.
- Projected Profit and Loss Worksheet - This Excel spreadsheet walks you through the process of developing an integrated set of financial projections.
- Small Business Loans - Tennessee has launched a new $25 million Tennessee Small Business Jobs Opportunity Fund offering loans to small businesses in all 95Tennessee counties. The public/private collaboration between the state of Tennessee, Member Banks of the Tennessee Bankers Association and Pathway Lending will bring together capital resources to maximize statewide impacts for job creation and business expansion.