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Ebusiness 101, Part 6: Finding Funding

Article Description:
====================

Every business needs start-up capital. These funds help you
purchase furniture and fixtures, computers and inventory while
still bringing in a livable wage during the first few years when
most companies see more red than black. But how much you need and
where this funding comes from differs from business to business.


Additional Article Information:
===============================

377 Words; formatted to 65 Characters per Line
Distribution Date and Time: 2006-10-03 10:48:00

Written By:     Ramon Sanchez
Copyright:      2006, All Rights Reserved
Contact Email:  mailto:[EMAIL PROTECTED]



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Ebusiness 101, Part 6: Finding Funding
Copyright (c) 2006 Vasrue.com, All Rights Reserved
Written by: Ramon Sanchez
http://www.Vasrue.com




Every business needs start-up capital. These funds help you
purchase furniture and fixtures, computers and inventory while
still bringing in a livable wage during the first few years when
most companies see more red than black. But how much you need and
where this funding comes from differs from business to business.

According to a Biz$hop article for Wachovia, the country's
fourth largest bank and diversified financial services company,
more than 17 percent of start-ups launch with less than $5,000
cash. So before you develop a funding acquisition plan, calculate
how much money your business can realistically generate to
finance its own expenses. Then define exactly how much money you
need to cover necessities, expansion or possible risks.

Start-ups have several options for acquiring funding – from mom
and dad to venture capital partners. Begin with your own
resources including savings accounts or home equity. Next, tap
into your family and friends. Next, research venture capital
firms. These are companies that finance start-up ventures who
have limited access to capital markets but need quick growth.
Angel investors are another source of business financing. Angel
investors are successful entrepreneurs that have money to invest
in other companies. Newspaper ads and person-to-person networking
is the best way to find angel funding sources. The Small Business
Administration (SBA) also licenses Minority Enterprise Small
Business Investment companies (MSBIs) and Small Business
Investment Companies (SBICs) to help fund critical growth
stages.

Many small businesses have survived the first few years using
credit cards and personal loans. Working or investment partners
can bring in funding or services that can save your company
money. For instance, if you partner with an attorney or a
designer, you save a great deal on legal or design fees. When you
need stronger financing, you'll need to discuss these goals with
a commercial bank, savings and loan or finance company. You may
qualify for a small business or SBA loan or line of credit. But
make sure you have sufficient collateral to guarantee funding in
the event of default. Borrowers want to make sure they give
credit to start-ups that have as much confidence in their own
success as the bank would be offering in loans. Stay tuned for
Part Seven: Finding People in this ten part series.





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