Business Credit and Loans
- It takes money to make money
- Determine exactly what you need to reach your initial goals.
- Plan for several stages of growth, but budget carefully. Decide on sources for financing. Compare your progress against your projections.
If you are starting a new business financing will be very difficult. Banks, lenders and credit card companies only deal with well established businesses and need to see income and contracts in your hand before they will even talk. They want to see stability, cash flow and assets that they can sell real fast if things do not work out. The chances of financing a new business are not very good. There is one way around this and that is personal resources, you are responsible for the loan. As in if the business fails you give them your house, car or whatever you have that has any value. The reality is that 80% of all businesses will fail in two years or less, and with a number like that you would not be willing to lend your money either. Small companies used to have access to private investors, now those small companies are competing with large corporations seeking capital. A search for angels should be undertaken.
The only exception to this is that your local welding supply store will most likely offer small credit lines. These credit lines are for buying equipment and or supplies. If you are a new business then you will want to get a Dun and Bradstreet number to start building credit. Business credit is not like personal credit and you need to personally report your payments (no one will do it for you) you made for products and services. You can find out more by visiting Dun and Brad Street at www.dandb.com. Just as a note many of the legal service websites listed in the previous section offer well established business structures for sale (you change the name to whatever you want later). Or they can set up a Dun and Bradstreet business credit identification number to start establishing credit.
If you have an existing welding business or are buying an established welding business then there are many options for borrowing money. Banks, lenders and creditors will be more than willing to talk because if you fail they can get their money back from the sale of the business.