A Bank or Government such as small business administrator are the two branches who can finance the new venture. If you are thinking of going to that route then these two common source of funding can help you in your basic funding and in future also. You just need to do few things and think about to prepare an application.
The lender will make look to make sure that you have credible business project and you have the in depth knowledge of the product you going to manufacture or trade into the market. Also he will ask you about how well you are aware of the market conditions and at which point of time you will start your business. You need to present your business plan, yearly expected revenue and expenses, your competitors, growth and possible exit. Also show how your expertise will be helpful to you in running the business. The most important thing is to prove that you will be having constant cash flows to help in repaying the debt.
A small financial plan statement has to be submitted along with the application indicating the projections for next 3 to 5 years. This statement will show the revenue projections, expense projections, how much finance you will need during these financial years and how it will be funded and used in business. Profit pattern is also to be properly represented showing the growth of business year wise.
It is true that business is a separate legal entity, and its owners will only invest money and share profit. But while starting the new venture lender will look to the credit history of borrowers. If the viability of project and financial projections are found strong, bankers will also agree to give personal loans with bad credit to the people with bad credit. You also need the copies of tax return to be submitted in order to show your personal income history.
It is not enough if you will just say that you are going to start business and you need funds. You should be able to explain them how you are going to use these funds; else they will perceive you don’t have clear vision about how to allocate the funds. They will also ask about your experience in business previously. Also the details about the company where you are currently associate and what is your role over there. The creditworthiness of a person will help him to get the loan if he has good business plan. For the loans to people with bad credit it will be some-what difficult to get the finance for new venture but if you are ready to pay little higher interest, or you have some assets to mortgage, along with good business plan you will be able to get the funds. Also lenders will analyze your situation critically because it’s there fund which is going to be used in your business, so they will be happy to here if you have some contingency plans also ready with you to repay the debts.