If you own the business entirely by yourself and plan to be responsible for all debts and obligations, you can register for a sole proprietorship. Be warned that this route can directly affect your personal credit. Alternatively, a partnership, as its name implies, means that two or more people are held personally liable as business owners. You don't have to go it alone if you can find a business partner with complimentary skills to your own.

Chris Guillebeau is a writer, entrepreneur, and traveler. His latest book, The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future, is now a New York Times bestseller. During a lifetime of self-employment and ventures ranging from online publishing to volunteer work in West Africa, he has visited nearly every country on earth before the age of 35. Host of the World Domination Summit, an international gathering of creative people, Chris is focused on encouraging individual quests while also “giving back.” His main website, ChrisGuillebeau.com, is visited by more than 300,000 people a month.
Government loans are typically offered through banks and credit unions that partner with the Small Business Administration (SBA). The SBA is a U.S. government body, with the motive of providing support for small businesses and entrepreneurs. For each loan authorized, a government-backed guarantee offers serious credibility, since the lender knows that even if you default, the government will pay off the balance. These loans can be applied to a number of uses, such as:
It’s natural to consider if these options are worth the possible bad effects down the road. Of course, for some business owners, not getting more financing as soon as possible could mean having to take drastic measures—even closing the business. The silver lining here is that most of the above will help recover your credit if you keep in good standing and make on time payments. There is a caveat: if you can’t make on time payments, these options will sink your business into debt and make matters worse.
Many business owners, however, are under the mistaken impression that they are completely protected from personal liability by filing a Certificate of Incorporation for a corporation. This is not true. The mere process of incorporating does not completely protect the business owners. To lessen the likelihood of such personal or shareholder liability, you should make sure to adhere to certain procedures:
If you don’t have a business idea yet but you do know you want to run your business, you might start by looking at our guide on coming up with business ideas. Or, you could consider turning a hobby you have into a full-time business. You could even pursue something in which you have a lot of experience. If you’ve been working in retail for 10 years, why not consider opening a boutique?
Depending on the size of your loan, your financial statements and accounting records will be reviewed carefully by the lender. So make sure they are complete, correct, and thorough—including balance sheet, income and loss statements, and cash flow statements. The lender will analyze your cash flow, gross margin, debt-to-equity ratio, accounts payable, accounts receivable, EBITDA, and more, so be prepared to answer questions on those topics. Consider having your accountant look over your financial statements to anticipate issues a lender may raise.

Maybe you want to build an empire and become famous, or create a wealth-generation machine that you can pass on to your children. Or perhaps you can’t convince anyone to recognize your unique vision and you’ve decided that it will never come to fruition unless you strike out on your own. Or maybe you’re thinking of self-employment because you’ve been unemployed for so long that you feel you’ve exhausted all other options.
A Rollover for Business Startups (ROBS) lets you take retirement funds from a 401(k), traditional IRA, or other eligible retirement account and invest them in your franchise, without having to pay taxes or an early withdrawal penalty. You can fund all or part of your business through a ROBS. Funds from a ROBS can be used as a down payment on larger financing, like an SBA loan, or to bridge the gap between other piecemeal loan financing options, like equipment leases, etc. Funds from a ROBS can also be used for franchise fees, consulting fees, and other costs that traditional loans often can’t be used for.

Many companies, however, don't have established credit, so they cannot obtain a business loan without a guarantee from the owners. In other words, you'll probably have to "co-sign" for the company's loan, putting your own credit on the line. If you'll be applying for a loan and your credit matters, do all you can to boost your own score before applying. This means paying down debts so your credit utilization ratio is low, and always paying bills on time. 
So think about how you can diversify your own business. Think about the risks you’re subject to, the technologies you’re dependent on, and how changes in the competitive landscape could blow you off course. Then come up with ways in which you can create multiple income streams, so that if one product or service is no longer popular, others can pick up the slack.
Banks and credit unions are traditional sources for small business loans, and they’re a good place to start. Especially with small institutions, you’ll be able to meet with a lender who can guide you through the process. Larger banks might take a more hands-off approach. To improve your chances of getting approved, ask about SBA loans, which reduce the bank’s risk and feature interest rate caps. The loan process at banks and credit unions can be slow, so be prepared for a long process and a thorough review from the bank.
Borrowers have multiple options for SBA-backed loans, including microloans with a six-year repayment term to allow new businesses to borrow up to $50,000; 7(a) loans that allow companies to borrow up to $5 million; and 504 loans, available for up to $5.5 million for smaller businesses with a net income under $5 million and a net worth below $15 million. 
The challenge is even greater for franchise owners looking to open new locations. They must pay a “franchise fee” amounting to tens of thousands of dollars, and the aforementioned deductions begin as soon as the new location opens its doors. Combine these expenses with inevitabilities like new equipment or furniture and you can see why business loans are popular for franchises. Multiple large expenses can easily pile up at the same time, making it extremely difficult to raise profits or save money.
To become an officially recognized business entity, you must register with the government. Corporations will need an "articles of incorporation" document, which includes your business name, business purpose, corporate structure, stock details and other information about your company. Otherwise, you will just need to register your business name, which can be your legal name, a fictitious "Doing Business As" name (if you are the sole proprietor), or the name you've come up with for your company. You may also want to take steps to trademark your business name for extra legal protection.

In some instances the franchise itself will extend financing to you. Some companies, like 7- Eleven, actually build the store for new franchisees and lease the location to you, meaning you incur minimal startup costs and the transaction is handled directly between you and the franchisor. Others, like Subway may buy back locations from existing franchisees and then sell them to you as a new location, meaning you'll be handed an established store, sometimes with existing employees and inventory.

Becoming a small business owner has unique challenges and rewards that aren’t right for everyone. You must be driven, disciplined and able to identify a product or service that people need — one that they will pay enough for to allow you to live comfortably. You have to develop marketing skills and be able to find your own work, because it won’t fall into your lap until after you’re well established. Business owners need to understand how to budget, keep records and handle small business taxes. They must familiarize themselves with employment laws if they want to hire staff. They also need a plan for protecting their business and everything that’s tied to it if something goes wrong. (For more, see Are You An Entrepreneur?)
He holds a FINRA Series 79 license (M&A investment banking), and a California real estate broker's license. He has sold businesses of his own as well as other people's businesses. Prior to law school Dana was assistant pastor at Calvary Foursquare Church in Hemet, California, and associate pastor at Cathedral of the Valley in Escondido, California. He was the vice principal of Escondido Christian School, and dean of Cathedral Bible College, where he also taught philosophy and theology.

The On-Line Tutorials is a set of courses designed to help interested parties learn more about the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs. As individuals learn in different ways, information in each course is presented in three different formats. Pick a format and then use that throughout. The Video format is designed for people who learn best by listening to others speak; while the Multimedia format, the default in each course, provides a mixture of text and video clips. For those that prefer to read, you can simply select the text or pdf version. The tools section contains materials to help facilitate both learning and retention. To see if you have truly mastered the materials in each course, be sure to take the short quiz either as a pre- or a post-test.
SCORE.org conducted research in 2015 that studied business growth in the United States between 1997 and 2014. They found a 67.8 percent increase in the number of women-owned businesses, compared with a 34.4 percent increase in men-owned businesses. The study also found a huge growth in the number of businesses run by women of color, up an incredible 215.7 percent, with revenues increasing by 193 percent. Latino-run small businesses also saw a massive increase, with small business ownership growing at a rate of double the national average.
I traveled across the U.S. and around the world, and kept meeting unconventional entrepreneurs -- people who had started a business almost unexpectedly, usually without a lot of planning and almost always without a lot of money. Most of them did so for $1,000 or less, and half of them did so for $100 or less. My goal was to tell their stories in a way that readers could use in their own quest for freedom.
A ROBS isn’t a loan, so there’s no debt or interest to pay back. This lets ROBS-financed franchises conserve more of their income, and as a result, they may be more successful in the long run. You do have to pay monthly administration fees when you do a ROBS, but compared to a loan the monthly fees are about 11x cheaper! This sets you up for a greater chance at long-term success than other financing methods.
Remember that a business is franchised for two reasons: to expand the business and to raise capital. So if you have a reasonably good credit record and pass all the financial requirements, most franchisors will bend over backwards to get you on the team. The help that franchisors provide to help you get financing usually includes assistance with business plans and introductions to lending sources. In many cases, franchisors serve as guarantors of loans you take out.
Using the navigation buttons on the screen, you can go directly to the information you need. You also can pause and bookmark lessons so you can review information at a later time. Best of all, you can return to lessons you didn't need when you started your business but might need now; for example, if you decide to start a retirement plan or your business has grown enough that you want to hire employees-- all the information will be here when you need it. Throughout these lessons, you'll hear from small business owners like yourself, and we hope that by watching these owners learn how to meet their federal tax obligations, you'll learn how to meet yours as well. Best wishes on your new business.
Create a logo that can help people easily identify your brand, and be consistent in using it across all of your platforms, including your all-important company website. Use social media to spread the word about your new business, perhaps as a promotional tool to offer coupons and discounts to followers once you launch. Be sure to also keep these digital assets up to date with relevant, interesting content about your business and industry.
Loans backed by the Small Business Administration (SBA) are a favorite of franchisees, since they tend to have higher limits and lower rates than commercial loans. However, SBA loans come with strict requirements, including the need to prove that you don’t have the ability to obtain a loan from traditional lenders. Partner institutions disburse and administer the loans with SBA approval and application requirements tend to be quite extensive.
“Not all businesses meet business loan eligibility requirements,” was Ali's initial comment on this topic. “Most banks have an income eligibility threshold of 1.25 times your expenses, including the repayment amount. [So] even if you do meet the requirements, think carefully before taking on the loan, and be sure you can service the repayment terms.”
With the relatively low margins in the restaurant industry, many franchise owners are cash strapped and may even have a turbulent credit history. This is not a problem. National Business Capital considers the big picture so a low FICO score does not pose an immediate disqualification. In fact, the majority of our clients were denied franchise loans from traditional banks before contacting us. Know that National Business Capital offers franchise loans to small– medium- and large-sized businesses nationwide – and works with all types of businesses, no matter what their credit history. Our clients’ franchise financing needs are addressed quickly, efficiently and with a personal touch, regardless of their credit score. Even an open tax lien will not disqualify an applicant.
Spend the next week working on your pitch, your business plan, and on researching your financing options. Remember that your business plan isn’t set in stone. It should remain a “live” document as you progress and as you grow. Don’t stress about it, just use this week to focus your thoughts and bring everything you thought about and learned in week one together.

There are more than 28 million small businesses in the United States, making up a whopping 99.7 percent of all U.S. businesses, according to the Small Business Administration. When you consider some of the most popular reasons to start a business, including having a unique business idea, designing a career that has the flexibility to grow with you, working toward financial independence, and investing in yourself — it's no wonder that small businesses are everywhere.


For existing franchises looking for working capital, another form of alternative financing comes from monetizing the franchise’s balance sheet to obtain funding. Using the franchise’s commercial real estate, or by tapping into the franchise owner’s personal real estate, an asset based lender can collateralize the real estate and provide working capital up to 90% of the real estate’s equity.
The franchisor: Some franchisors help finance new franchises by waiving fees or partnering with lenders to help franchisees get loans. If a company offers funding, it’s usually listed on its website and in Section 10 of the Franchise Disclosure Document. Compare the terms of the franchisor’s financing with other options to find the best source of funding.
These Small Business Workshops are being offered solely as a courtesy to TD Bank Customers. The information is supplied on an "as is" basis and should be used at your own risk. Neither TD Bank nor the authors or providers of the content of the workshops make any representation or guarantee as to the accuracy and/or reliability of such content nor shall any of the foregoing parties or their employees be liable for any loss or damages suffered as a result of any use of such content.
Market research is important because it will help you figure out whether or not there is demand for the service you’re offering or the product you’re selling. It will also help you when it comes time to write your business plan, especially if you’re pitching an angel investor or a venture capital firm. They will want to see there’s a market for your idea, otherwise, it won’t scale as rapidly as they need it to in order to make a return on their investment.
Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

If you have a newer franchise or need capital ASAP, OnDeck (see our review) is one of the easiest and quickest ways to get a short-term loan or line of credit. Though OnDeck isn’t specifically geared toward franchise owners, it’s a viable online loan option for any type of small business owner that doesn’t qualify for a bank loan or doesn’t want to wait months to receive loan funds. OnDeck also recently partnered with the Franchise Council of Australia in an effort to better serve the global franchise market (fun fact: Australia actually has more franchise outlets per capita than America).

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.
Opening a franchise can be a smart choice for an aspiring entrepreneur. Becoming a franchise owner gives you the flexibility of owning your own business with the added security of being part of an established brand. However, as with owning any new business, start-up costs can be high and you may require infusions of capital if you encounter hard times. Franchisees must also pay a franchise fee when opening a new franchise, as well as ongoing royalty fees. You truly need a good business plan, healthy cash flow, and solid franchise financing to succeed.
As the saying goes: "The only certainties in life are death and taxes." Unfortunately, this is also true if you start a business in Australia - you absolutely must register for the correct taxes to avoid any potential legal implications. The taxes you must register for are dependent on the type of business you choose to start, with some applicable to every type and others only mandatory for certain types.
According to Meme Moy, a spokesperson for FRANData, about 2,000 franchises are currently on the Registry. When a franchise is on the Registry, lenders can see its historical loan performance. About 55 % of lenders only lend to franchises that are on the franchise registry, so this an important step in choosing a franchise. By choosing a franchise that is on the Registry, you can get better and faster access to SBA funding. To check if your franchise is on the Registry, click here.

Most people spent *some* amount of money, even if it was just the cost of a $50 business license or a $10 domain name. But far more important than money was the investment of sweat equity -- taking the time to make something meaningful. Brett Kelly wrote Evernote Essentials, a guide to the free Evernote software. His initial goal was that it would make $10,000 over the course of a year. One year later, it had made more than $100,000. Initial startup costs were essentially zero.
If you've always wanted to start your own business but have been afraid of the financial risk involved, opening a franchise might be the perfect solution for you. With a franchise, you get all of the independence, responsibility, and potential profit associated with owning your own business. Unlike starting a business from scratch, a franchise comes with a proven business model and a well-known brand, reducing your risk of failure dramatically. Lenders are well aware of the benefits associated with opening and operating a franchise and are more willing to approve franchise loans than a standard small business loan for a start-up.
Hi, I am really trying to start my own trucking company doing hot shot services. I know plenty companies that would let me handle their needs but with the cost of living being so high in the city it makes it so difficult to save money to get started with bills and child support. If anyone knows anybody that could help me get a small business loan I would gladly appreciate it.

A franchise ACH merchant cash advance is very similar to a MCA split in that they are both not considered “loans” but are instead the sale of the franchise’s future earnings. The difference between a MCA and an ACH is how the funder is repaid for providing financing to the franchise. As mentioned previously, a MCA lender will collect repayment by splitting merchant processing sales. With an ACH advance the repayment is made by having the funding company take a set amount from the franchise’s bank account each business day until the advance is repaid.

The government-guaranteed SBA loan program works with banks to offer low interest rates and long-term repayment. But the process is time-consuming, and the requirements are strict. Only those with good personal credit (690 or higher, although some SBA lenders may have lower score requirements), strong business finances and the flexibility to wait for funding should apply.
To find out the best ways for new business owners to secure loans, I consulted with experts who have a wide range of experience with funding businesses including Jared Hecht, CEO of the online lending website Fundera, David J. Hall from the Small Business Association, Hal Shelton who is a SCORE mentor and author of The Secrets to Writing a Successful Business Plan (Summit Valley Press 2014) and Larry Conley, Senior Vice President and Specialty Finance National Manager for Chase bank.
Rent and rent escalations. Some landlords will give free rent for the first month or two of a lease. Fixed rent over longer-term leases is relatively rare. Sometimes landlords insist on annual increases based on the percentage increases in the Consumer Price Index (CPI). If your landlord insists on rent escalations, try to arrange for a CPI rent increase that does not kick in for at least the first two years of the term. Then, try to get a cap on the amount of each year’s increase. If you have to live with a rent escalation clause, try to negotiate a predetermined fixed increase; for example, a rent of $5,000 a month the first year that would only increase to $5,200 a month the second year and $5,400 a month the third year.
One basic way to protect proprietary company information is through the use of a Confidentiality and Invention Assignment Agreement. This type of agreement deals with confidentiality issues, but can also ensure that the ideas, work product, and inventions the employee creates that are related to company business belong to the company—not the employee.
Franchisees who are operating a franchise location typically have their pick of financing options. We think the streamlined SBA loan from SmartBiz is the best option for those looking for up to $350K in working capital. With low SBA rates and 10-year repayment terms, these loans do not squeeze cash flow. Plus, SmartBiz has drastically reduced SBA loan funding times. Prequalifying online takes just a few minutes and they get loans funded in as little as 2 weeks.
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 Assets – Getting a traditional loan for a franchise can be difficult. The more personal resources you can bring to the table, such as retirement funds and personal savings, the easier it will be to buy a franchise. If you’re planning to get a bank loan or an SBA loan, then you at a minimum need a 10-20% down payment and some collateral (if the franchise involves the purchase of real estate, that can be used as collateral).
Depending on the size of your loan, your financial statements and accounting records will be reviewed carefully by the lender. So make sure they are complete, correct, and thorough—including balance sheet, income and loss statements, and cash flow statements. The lender will analyze your cash flow, gross margin, debt-to-equity ratio, accounts payable, accounts receivable, EBITDA, and more, so be prepared to answer questions on those topics. Consider having your accountant look over your financial statements to anticipate issues a lender may raise.
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