We have some great news for you – there are more financial resources available to start or expand a business in the Big Country than anywhere we know of. In order to finance your business, you should be able to meet three qualifications:
- You must present a reasonable business idea.
- You must prove that you are capable of running it.
- You must put in some money, equipment or collateral of your own.
There are various ways to finance a business:
- Bank Financing – A bank will normally require a good credit score, a percentage of owner’s injection (usually at least 20%), and a business plan.
- Micro Lender – Typically charge a higher interest rate than banks, but sometimes will finance with lower owner injection and/or credit rating. They sometimes accept collateral which a conventional bank might not consider. Two commonly used micro lenders for the West Texas area are:
- SBA Financing – If you are seeking SBA financing, it must be processed through a bank or other lending institution such as a micro lender or credit union which is authorized for SBA lending.
- Private Investor/Venture Capitalist – An investor who either provides capital to startup ventures or supports small companies that wish to expand but do not have access to funding. Venture capitalists expect a return on the investment either in the form of a loan with repayment terms or a percentage of ownership in the business.
- Angel Investor – An individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.