To determine financing needs, you should first prepare a business plan with a complete set of financial projections including a balance sheet, income statement, and cash flow statement. With a properly completed business plan, you will have identified your funding needs. Banks will lend to some business start-ups if they are satisfied with your business plan, your level of equity investment, the collateral you have to pledge to the loan, and your credit history and experience.
Grant monies are usually not available for new venture businesses, with a few exceptions of high technology businesses. You can find grant information at your local library and online at www.grants.gov, www.cfda.gov and www.sba.gov/expanding/grants.html.
Except in isolated and special situations, the U.S. Small Business Administration (SBA) does not make direct loans. Its loan activity is in the form of participating loans and loan guarantees. You can think of the SBA as an entity one level above your bank that provides incentives to your bank to make it easier for you to get debt financing.
You must deal with a bank to reach the SBA. The bank plays a major role in evaluating your loan application and in administering the loan. The bank's agreement is necessary before the SBA will get involved.
The SBDC does not provide financing. Our assistance is technical and educational in nature. We work with banks and other lending agencies and organizations to assist in putting together financial projections, but the actual financing comes from outside sources. We have strong relationships with lending institutions that may benefit your chances of receiving funding, but we have no say in whether or not you receive a loan. Having inside knowledge of these lending institutions does allow us to match your business, credit, and business plan with an appropriate lender, which may increase your odds of getting financed.