It’s time to reach into the Adviser mailbag and answer some of the common questions I have received from local business people as well as from people who are working on business start-ups.
How does a business get a bank loan these days? It seems that the only people who can get a loan are people who don’t need them.
No doubt it’s more difficult to get a bank loan today than it was five years ago. As the economy declined banks have seen chunks of their loan portfolios go bad, requiring them to adjust their loss reserves which has affected the amount of money available for loans. Banks are in the business of making money for their shareholders, so they are most concerned about a loan applicant’s ability to repay the loan. Banks will look closely at a loan applicant’s cash flow, collateral, credit history, and business plan, and in all likelihood they will expect a personal guarantee. These criteria make it difficult for new businesses to get start-up financing from banks, so start-ups must often consider using use their own money or borrowing from friends or family to get off the ground.
Where are the government grants for businesses?
Many of us have seen the late-night commercials with the wacky guy claiming that the government is giving away millions of dollars and offering to sell you his guide so you can get your share of this bounty. Here is the scoop straight from the Small Business Administration website ( www.sba.gov ): “The federal government does NOT provide grants for starting and expanding a business. Government grants are funded by your tax dollars and therefore require very stringent compliance and reporting measures to ensure the money is well spent. Grants from the federal government are only available to non-commercial organizations, such as non-profits and educational institutions in areas such as, medicine, education, scientific research and technology development.”
For information about government grants to eligible organizations, check out www.grants.gov .
Do I need a website for my business? How much will it cost?
Many people use the Internet to conduct research before making a purchase or to learn about a company before doing business with them, so it’s almost mandatory to have an Internet presence in today’s marketplace. This presence may be nothing more than an electronic brochure or it may be a site where you conduct e-commerce. Costs vary dramatically depending on how much functionality you need and who works on your site. For a basic electronic brochure-type site, I would expect to pay several hundred dollars. If you want a more sophisticated site with multiple pages and search engine optimization features, I would expect to pay several thousand dollars. Yes, it’s a broad range so shop around.
How do I learn more about my competitors?
Successful businesses continually collect information on what their competitors are doing to adjust their strategy as needed. As mentioned in the previous question, this Internet thing seems to be catching on, so start with some Web surfing to learn about the competition. Our local public libraries also have business research sections to help, and they can set you up on NCLive.org, a collaborative online program which provides free online access to journals, magazines, newspapers and a variety of business resources.
Do you have a business question or topic that would make a good column? Send your ideas or questions to jeff.neuville@b-assistnc.com and share your business experience with others.
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