Download - Basic Funding Options for Your Business
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Small Business Financing
Presented by:Kristin Slice,
Business AnalystAmerica’s SBDC
Maricopa
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Sources of Small Business Financing
IV. Financing a Small Business
U.S Small Business Administration – Office of Advocacy 2014
The most common sources of start-up funds are owner’s and relatives’ savings coupled with credit cards and vendor credit lines.
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Sources of Small Business Financing
IV. Financing a Small Business
U.S Small Business Administration – Office of Advocacy 2014
The most common sources of start-up funds are owner’s and relatives’ savings coupled with credit cards and vendor credit lines.
57% is personal or bootstrapping. 38% of start up funding comes from friends and family.
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Financing Basics
• Debt vs. Equity• Family & Friends• Angels• Venture Capital• Crowd Funding• Sweat Equity
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Financing Basics
• Debt vs. Equity• Family & Friends• Angels• Venture Capital• Crowd Funding• Sweat Equity
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Angel Investors
• Friends and family and f___s• Successful people you know• Professional Angel Investor• Angel Groups• Angel Funds
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AngelsAngel is lower amounts ($100k-$2M) with lower company valuations (startup likely under $2M valuation).
Angels take less active role in mgt decisions than a VC might seek. Angels are typically individuals who have done well on their own and seek to give back to some degree.
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Incubators and Competitions - Venture Madness - InnovateHER
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Angel
Remember….only ___ % of businesses get angel funding.
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Angel
Remember….only ___ % of businesses get angel funding.
.91% - Entrepreneur Magazine, 2013
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Financing Basics
• Debt vs. Equity• Family & Friends• Angels• Venture Capital• Crowd Funding• Sweat Equity
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What type of funding is missing…
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What type of funding is missing…Any guesses why???
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What type of funding is missing…
Grants!!!
Any guesses why???
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What type of funding is missing…
Grants!!!
Any guesses why???
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Banks / Debt Equity
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Banking• National • Regional • Community
What is an SBA Guaranteed Loan?
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Alternative Lending• Micro Lenders• Crowdfunding• Factoring• Asset Based
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5 Key Borrowing Questions
• How much do you need?• What will you do with it?• When will you pay it back?• How will you pay it back?
- Where’s the the cash flow • What if something goes wrong?
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Five C’s of Credit
• Capacity – Cash Flow & Profits
• Collateral – Assets available
• Capital – Skin in the Game
• Conditions – Economic Conditions
• Character – Credit History, Trust
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The Loan Application• Business Plan• P&L and Balance Sheet - Current / 2 years• Accounts Receivable Schedule• Accounts Payable Schedule• Business Debt Schedule• Cash Flow Projections -12 months / 2 years• Revenue Forecast - Current / 2 years• Tax Returns - Biz & Personal - 2 years• Personal Financial Statement• Capital Requirement / Use of Funds
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How we help:
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The Turn Down• What does NO really
mean?• Turning no to yes?• It’s not personal• Persistence is the key to
success
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What if the answer is Yes?
• Negotiations• Commitment Letters• Documentation
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Lets talk about the elephant in the room…
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In Summary- Find out how much money you
need and put together a plan.
- Find the right funding source
- We are here to help you
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Financing for your Small Business Workshop
Presented by:Kristin Slice
America’s SBDC Arizona@kristinslice