If you do decide you’re going to need space, consider the number of employees you’re going to need and the equipment that will fill the space—chairs, photocopying machines, a fridge, a coffee machine, a reception area, a meeting room, and so on. Furthermore, how quickly do you expect to grow? If rapid growth is in the books, rent a space where there is room for growth and so that you don’t have to change your business address.
Equipment loans. If you’re specifically looking for cash to fund the purchase of new equipment – including vehicles, manufacturing or production machinery, farming equipment, or other necessary equipment – then an equipment loan or leasing program may be what you need. Like business loans, equipment loans offer fixed interest rates and payment plans over a period of time.
Opening up a franchise is a huge undertaking that takes no shortage of time and effort. Once you’ve done your homework to find a franchisor you want to work with, you’ll want to review the funding options available to get the ball rolling. When you’re taking out financing, be sure to work with a reputable lender, getting only the amount what you need.
Companies sometimes think that patent protection is the only way to protect themselves. Technology startups frequently ignore the value of non-patent intellectual property. While patents can be incredibly valuable, it does not necessarily ensure that a company’s product is a good product or that it will sell well. Trade secrets, cybersecurity policies, trademarks, and copyrights can all be forms of IP that can be protected.
Business loans. For larger investments, it may be time for a term loan. Like a mortgage or personal loan, term loans come with fixed interest rates and monthly payments over a period of years. Unlike a line of credit, a business loan will provide you with a large sum of cash upfront. These loans can be ideal for expanding your space or funding other large investments.
Starting a small business typically involves a lot of moving parts. In fact, time management can quickly become a challenge for entrepreneurs who are digging into the business start-up process for the first time. I compiled a list of 10 of the most important steps involved in starting a business and broke them down into easy-to-follow tutorials. Use this guide to make sure you're focusing your attention on the most important stages of starting a business and find out what you need to know so you can streamline your work for each of those steps.
Startups should also understand that the venture process can be very time consuming—just getting a meeting with a principal of a VC firm can take weeks; followed up with more meetings and conversations; followed by a presentation to all of the partners of the venture capital fund; followed by the issuance and negotiation of a term sheet, with continued due diligence; and finally the drafting and negotiation by lawyers on both sides of numerous legal documents to evidence the investment.
The purpose of these checks is to make sure that the applicant will fit into the company’s culture and to ensure that they have been truthful and accurate in their resume and employment application. However, the process is carefully regulated by the federal government (through the Fair Credit Reporting Act) and the laws of many states; failure to follow the highly technical process can lead to class action lawsuits. Consider consulting legal counsel and, for general information, see the EEOC’s Background Checks: What Employers Need to Know.
While it can be tempting to pick a lower-priced option to lower your risk, it’s important to make sure you aren’t compromising too much based on finances. Instead, consider a loan or other method of financing that can help you get you started. Some franchising companies run their own franchise financing programs to help franchisees get in the door.
A contract is, in essence, a written meeting of the minds. While it is typically drawn up by one party and favors the needs and requirements of that party, protecting them from most (if not all) liabilities, it should initially be thought of as a work in progress that changes and grows as each party contributes prior to signing, after which it becomes an official document. “Consideration,” whether it is monetary or a promise to do work or provide a service by a specified date, is at the root of a contract.
An SBA loan has two major disadvantages for franchises. First, it takes a significant amount of time (30-90 days) to fund. Second, you can’t use the funds from an SBA loan to cover many startup costs, including franchise fees. Those will have to be paid as an out of pocket cost. However, if you can live with these two disadvantages, then SBA loan rates are typically the lowest you’ll find. You can use our SBA loan calculator to determine what your monthly payments might be.
We love this lender for their sterling reputation, excellent customer support, and reasonable terms and rates. But again, you’ll need to already have an established franchise to qualify, as well as good credit. This loan also takes longer to apply for (and receive) compared to most other online franchise loans, and it can potentially take a couple months for the money to come through. You’ll need to submit all the documentation you’d need to get a traditional SBA loan, and it will be helpful if your franchise is already listed in the SBA Franchise Directory. Even though there are a few more hoops to jump through than with other alternative lenders, SmartBiz is still one of the quickest ways for a franchisee to get an SBA loan.
For-profit lenders are reluctant to issue loans to anyone who does not have a strong credit report and financial history. That is not the case with government small business loans. Obviously, a decent credit report is important, and you will have to follow the guidelines regarding the repayment period and the interest rate set by the government, but usually the interest rates charged by government loans are lower than those you could expect in the private sector.
The staff at Key Commercial Capital was wonderful. They made sure to explain all our options in detail and were always interested in the best for us. They verified our documents before submitting for approval to ensure everything was in order and that the application and closing process was as smooth as possible. They were also very responsive and available at all times. I will certainly be back on the next opportunity.
Congress passed the Commercial Motor Vehicle Safety Act of 1986 to ensure that drivers of commercial motor vehicles are qualified to operate those vehicles. States have the right to issue a driver's license, but they must meet minimum national standards when issuing a commercial driver's license. The Commercial Driver's License (CDL) Program places requirements on the commercial motor vehicle driver, the employing motor carrier, and the states.
ApplePie Capital (see our review) is an online lender that specializes in franchise financing. Founded in 2014, ApplePie was one of the first online lenders to offer franchise financing. After recently acquiring another franchise lender, ApplePie has expanded its offering to include SBA-backed loans, equipment loans, and conventional loans, in addition to its original “core” 3-7 year loan.
Personal loans are widely available, but if you’re trying to borrow for a small business, you’ll find that the process is more difficult. If you’re thinking of borrowing to start or grow your business, get started and get organized long before you fill out an application. Lenders want to be sure that they’ll get repaid, which means they’re looking for several criteria:
Tenant improvements. Your new space may need some improvements or alterations (a new paint job, new carpeting, a reconfiguration of the space). Which party will pay for these improvements depends on how tight the commercial office space market is in your city. Most form leases stipulate that the tenant can’t make any alterations or improvements without the landlord’s consent. Ask for a clause that says you can make alterations or improvements with the landlord’s consent, and that the consent won’t be unreasonably withheld, delayed, or conditioned. Often, you are able to negotiate a “tenant improvement allowance,” which is an agreed-upon sum of money that the landlord will provide for the improvements and alterations you would like to make.
Instead of spending hours playing with accounting software, dreaming up potential expense and income categories, and creating fancy reports with no data, spend that time generating revenue. As long as you record everything you do now, creating a more formal system later will be fairly easy. It will also be more fun, because then you'll have real data to enter.
A franchise merchant cash advance (MCA) is a short-term loan that provides capital to franchises that need funding quickly. Approval for a merchant cash advance can take a matter of minutes, and funding can be completed in as little as 24-48 hours. Merchant cash advances work by having a funding company purchase a portion of your franchise’s future receivables at a discount, with an upfront payment to the franchise. After funding the funding company will then collect repayment by splitting each days credit card batches with the franchise.
Richard D. Harroch is a Managing Director and Global Head of M&A at VantagePoint Capital Partners, a large venture capital fund in the San Francisco area. His focus is on Internet, digital media, and software companies, and he was the founder of several Internet companies. His articles have appeared online in Forbes, Fortune, MSN, Yahoo, FoxBusiness, and AllBusiness.com. Richard is the author of several books on startups and, co-author of Poker for Dummies and Mergers and Acquisitions of Privately Held Companies (Bloomberg), and a Wall Street Journal-bestselling book on small business. He was also a corporate and M&A partner at the law firm of Orrick, Herrington & Sutcliffe, with experience in startups, mergers and acquisitions, and venture capital. He has been involved in over 200 M&A transactions and 250 startup financings. He can be reached through LinkedIn.
The Louisiana Secretary of State, Louisiana Department of Revenue, and Louisiana Workforce Commission are working to make it easy for you to manage your Louisiana business filings and tax account registrations from one location―the Louisiana geauxBIZ portal. geauxBIZ can help you find resources to help plan, make key financial decisions, and complete legal activities necessary to start your business. You can also use geauxBIZ to produce a list of possible federal, state and local licenses and permits required for your business, to reserve your new business name, and to complete your new business filing. If you want to do business in Louisiana, visit geauxBIZ to get started!
2. Get a website. In today’s technology-based world, the first thing a potential customer or employee does is Google your business. You need a website to show you’re real and to offer information about your business to potential customers. Make sure your website is mobile-friendly and be sure to ask for search engine optimization. Use Google Analytics to track the traffic to your website, but be leery of people who promise you top positions on search engines. While there are lots of things that can be done to increase your ranking on various search engines, unless the developer works for Google, I would be leery of a promise to get you to the top. Remember that you get what you pay for. There are a ton of do it yourself website services, but depending on the features you need on your site, some things are better left to the experts.
The lender will want to know how much funding you are seeking and how the loan proceeds will be used. Will the loan be for equipment or capital expenditures? Expansion or hiring? Increase in inventory? Enhanced sales and marketing efforts? New research and development of technology? New product development? Expansion into new facilities or territories?
If you’re like the majority of new startups, cash flow will be your primary concern. You can have the best business plan in the world, but it won’t be of any use if you don’t have the money to keep the lights on while you’re getting your feet on the ground. With this, it’s important to know what resources are available to make the initial growth period a lot easier.
Your place on the credit spectrum is one factor that will determine which loans you’ll qualify for. You can get your credit report for free from each of the three major credit bureaus — Equifax, Experian and TransUnion — once a year. You can get your credit score for free from several credit card issuers as well as personal finance websites, including NerdWallet.