This stage is all about planning. Build your business plan and funding strategy while preparing to launch your business. Explore different types of funding that you may need at future levels and find out what steps you’ll need to take to secure that funding.
Sources for startup funding may include personal and family assets, business credit cards, outside investors, and microlenders. Lenders prefer to work with entrepreneurs who are invested in their businesses. By investing your own money, you are demonstrating your commitment to make the business succeed.
In this stage, it’s important to have flexible and reliable funding. Take advantage of opportunities to grow, but be aware of the limitations of your resources. Consider these funding options: business line of credit, equipment and vehicle finance loans, business loans, and an SBA 7(a) loan.
In this stage, your focus is staying ahead of the competition and constantly improving your product or service. Don’t get stuck in financing that was designed for your startup. Assess existing loans and other debt and determine of what is best for your business long-term. This is the time to consolidate debt, refinance equity, or consider opening an equity line of credit or a loan.
Most businesses rely on financing for expansion. Whether you are funding a new product line or moving to a bigger location, it’s important to have a realistic grasp on your margins and cash flow before looking at funding options. Explore business real estate financing, business term loans, SBA 7(a) and SBA 504 loans, and equipment/vehicle financing in this phase.
When you prepare to transition your business to new ownership, it’s vital to consider your business’s value. Work closely with the new owners to resolve ongoing financing needs and debt management.