Question Hello I am trying to locate some information on grants for small business start up. Do they exist are can you just get a loan to start a small business? Also looking at maybe starting a waste remediation business in the wake of hurricane Katrina and Rita. I reside in Baton Rouge, LA so I thought this would be a relevant business to start, would there be any federal funding for this type of business?
Answer For grant information visit official government website: www.grants.gov
Yes, you can recieve start-up business loan.
How to apply for a small business loan?
Create business plan. It must include projections for at least 2 years.
Make sure you have 20% - 30% down payment
Make sure you have collateral. The following is the formula to calculate collateral:
Collateral = (Personal Real estate value*0.8 – Mortgage) + Commercial Real Estate Value * 0.8 + Equipment value *0.5 + Inventory *0.1
Make sure your credit score is 680+.
Make sure you have relevant experience. Banks will never finance career change.
Collect all necessary financial documents:
1) Personal tax returns for the last 3 years
2) Personal financial statement
3) Projections for 2 years.
While choosing bank, keep in mind that banks are specialized entities If you wanted Chinese food, you wouldn’t go to a steak house, would you? Banks are organized the same way. You will never find a bank that does all types of businesses and all types of loans.
Do your homework. Call the bank, ask for a business loan officer and describe your business type and your financial needs. Try to avoid banks that will give you a general answer: “We make our credit decision on a case per case basis”. Most likely you will waste money and most importantly your time.
Complete loan application – make sure there is no arithmetical errors, mistypings and all personal financial information is correct.
Submit the complete package – all documents that were requested by the loan office, in the order that was requested to the bank.
