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Where to find financing? There are variants:

* Banks

* Venture capital trusts

* Leasing

* Etc. etc. etc.

But, pledge is required to banks; venture capital trusts don’t give 100 % of financing, etc. What to do? A direct way is refer to the private investor. Only where to find him this is a question. If there are acquaintances or relatives who can enclose in your business all is clear and if those are not present? It is possible also to wait when the investor will appear.

And try to think non-standardly. If you don’t know where to search for them, let them find you. Make a seminar (presentation) of your project. Your purpose is to interest these people to invest in your project.

It is not necessary to base your seminar on a theme: “give me money”. It is necessary to bring softly and correctly information to the investor that everything told by you at a seminar has under itself some soil for the investment and you are that person who understands a problem to the smallest details that is why for you it is necessary to entrust money under such remarkable idea.

And it shouldn’t be the seminar, under the name: “who has a lot of money come here!”. Show sharpness, don’t deceive people and show them a seminar theme in such foreshortening in which it will interest them. For example, it can consist of several parts: theoretical, practical, and concrete your project. The main thing it should be interesting, useful and you should over be competent.

That is what is necessary for a seminar:

* Time. Date and time should correspond to possibility to visit it.

* the Venue. All should be made in the standard traditions of carrying out of seminars.

* to Find potential investors. Where? First, there are many companies,a concrete personnel (that is – potential private investors of your project). Here they also should dispatch professionally prepared brochure of a seminar. Take the newspaper, magazine – give advertizing.

* to Create a packet for the investor – perfectly prepared printing copy of your seminar which will give out to listeners.

* Make business cards

* Make presentation (not on words), but use software solutions, for example, order a slide and screens. Create additional materials

Rejoice to questions. If there are some questions it means everything has passed not too badly.

Be afraid of questions, if you can’t confidently answer it is a complete failure for you.

And the main task of a seminar it is to trust in yourself and your own project.

Certainly, will come less people than you count, maybe, nobody comes. And so such wouldn’t happen, necessarily ring round and confirm participation of those to whom you personally dispatched invitations. In a week time make one more seminar, for new participants.

The times when governments have been flooding people with all sorts of grants have passed. At least for a while. But that does not mean that you must get rid of the idea of getting small business grants.

Everything is possible with nicely balanced attitude; small business grants including.

Read this blog for more practical tips about grants, how to apply for grants, grant examples, ups and downs of the grants. This information will help you to get small business grants or any other grants easier.

Stages of business, task and financing

Let’s consider a way of working of a certain virtual business. We will specify each stage of a task which stands during this moment and also financing ways.

The family business:

* There is an idea and all. Nothing more isn’t present: there are no: business plan, market researches, experience of business dealing, the personnel, a command of managers, potential risks, tasks and finances management. At the best there is an experience of circulation with a product (the goods, service). The idea generator, the head, the contractor is one person.

* What it is necessary to make? To constitute the business plan, to estimate a market outlet, to study competitors, specify, how business will develop, to estimate its potential, to form a team having allocated obligations and to generate structure.
* Usual sources financing are less accessible. The risk level is too great and there is no definiteness in success as in general, and in time of achievement of results. Private investors, the personal savings, some micro credits can also accessible.

Beginning business:

* The business plan is developed. The command is collected. There is a certain structure of the company and the hierarchy is also created. Market research is conducted, clients (and already there are ready contracts and agreements). Preselling preparation of a product is produced.

* What it is necessary to make? Finish product that can be ready to sale to sale, to finish the business plan and marketing researches, to complete a command and to start the process.

* It is not interesting yet to the majority of investors. Only some venture capital trusts can show interest in the event that there is competently constituted business plan, professional command, potential, a know-how (if it is required and the proved ownership right). Search of means is the main task also will occupy from several months till 2 years.

The developing business:

* The Company grows; the product is claimed by the market. Clients are generated and their circle grows. The command is generated and works. The monetary flow is. Shortage of means for development is felt and the market allows developing.

* What it is necessary to make? It is necessary to increase a market share even to the detriment of profitableness, by performance improvement and reduction of costs, to construct the branched out structure and logistics system.

* At this stage the company is a tidbit for all investors and financiers, especially for venture capital trusts. For them it is the most preferable round of financing. Debt instruments are accessible, but they, at wrong planning can put an end to the company (during this period at the company an acute shortage of circulating assets).

It is very crucial that government, despite this crisis is not leaving to assist small businesses. And small business grants can be a real helper right now.

But, of course, you should remember that today the fight for small business grants as well as for other kinds of grants is harsher. This is natural – more businesses need them. So before you start your battle for the small business grants, please check out this blog for more
details about grant industry.

Jack Danny got tired from constant change of a place of work and he has decided to begin the business. Living in suburb, he saw that in district all time there are faults with deliveries of the bakery goods. Here he also has decided to open a bakery. However, having constituted the business plan, Jack has understood: he can cover with own forces only 15-20 % of all costs. Therefore it was necessary to go to bankers.

In words all banks were ready to give money and as has reached business — in one have told” unpromisingly “, in the second they at all don’t credit such business branches and in another the bank agreed to borrow a maximum of 70 % of the necessary sum. Having thought, I have offered partnership to one of friends, and missing 50 % all of us took on credit. However, we will try to extinguish it as soon as possible because to give every year 35 % to bank — it is very unprofitable”, — Jack tells.

If it is necessary to receive pair of hundreds thousand dollars for a business “start”, really, it is necessary to work fairly for it. Someone from banks agrees to give the credit of the state of emergency, working exclusively in service trade and someone — under export-import transactions and someone — to only non-polluting business.

Besides, the bank will demand liquid pledge and will credit, most likely, under the high rate and also foreign currency credits are accessible only to those who already performs export operations.

Whom they give money to?

From the first thirty of banks small-scale business crediting is declared at least by half. But beginning businessmen in the ranks of the clients are ready to see only few of them. However, in the first case the specialist of bank has refused to name even rough credit conditions. All dares exclusively in an individual order, after project studying.

In one of the banks the credit is given both to start new business and on expansion of already working one. The maximum amount — 0,5 millions dollars can reach a crediting period of seven years. The rate is attractive enough: 11,75-14,5 % in dollars and euro. Unconditionally, pledge is required: the real estate, a car, the equipment, even the deposit will approach. Though, the kind of provision and definitive conditions all the same depend on that how much perspective credit managers will consider the business project.

Other banks agree to credit, if business works not less than one-two years, a minimum — half a year. By our estimations, in crediting of new clients today actively and purposefully are engaged no more than 10 banks. Business startups “only are interested to credit the majority in the event that the company and the businessman already have another, core business”, — the head of department on development of small and average business explains.

It is very crucial that government, despite this crisis is not abandoning to assist small businesses. And small business grants can be a true helper right now.

But, of course, you should remember that today the fight for small business grants as well as for other types of grants has become harsher. This is logical – more businesses need them. So before you start your battle for the small business grants, please check out this blog for more
details about grant industry.

Special programs for the business start up

If business works already at least six months then there is a possibility to take a loan in other banks under the joint program from the European Reconstruction and Development Bank. Rates under such programs start from 17-20 % in a dollar or euro currency. If means are necessary on purchasing of the equipment, real estate and a car, it is necessary to bring to 30 % of advance. The maximum crediting period is till five-seven years, a credit amount — to $3-5 million or their equivalent.

Means are given by many banks, both on replenishment of circulating assets and on purchasing of basic funds. However, if in the second case it is possible to count on the maximum credit period for “injections” in circulating capitals banks give money only for a year-two.

Also in all cases it is necessary to provide the money received on credit with liquid pledge. And if the equipment, real estate or a car is on credit acquired, it can appear insufficiently and it is necessary to pledge something else — real estate or the car. Moreover and at that cost which will be exposed by the bank appraiser.

Bank’s severe selection:

For reception of the credit the businessman should give impressive quantity of documents: from the registration certificate and the inquiry on movement of funds under bank accounts to the reporting for the last half a year-year and the plan of financial receipts for the term of credit reception.

New or “developed” business it is even more difficult: the bank demands the developed business plan which will explain why these goods or service will be on sale is better and will make profit in a year-two. It is very probable that to the borrower beginning new business will suggest to finance on 25-30 % of the project for the personal means and the remained 70-75 % — at the expense of the credit. Will analyze cost efficiency of the project captiously — the decision depends on it. If the bank comes to a conclusion that profitability of the project won’t allow the borrower to serve the credit no credit will exist basically.

The estimation of mortgage property is conducted by bank and paid by the borrower. And it is quite probable that assessment value of apartment, office or the equipment will be essential below expected. So banks aspire to secure themselves in case of credit non-payment — that even at urgent sale of pledge on knockdown price money for its repayment has sufficed.

Some banks are ready to support the businessman-borrower — offer so-called “credit vacation” for using first year-two the credit. During this period the client can not repay the credit indebtedness.

The days when governments have been flooding people with all types of grants have passed. At least for a while. But that does not mean that one must forget the idea of getting small business grants.

Everything is possible with nicely balanced approach; small business grants including.

Read this blog for more practical tips about grants, how to apply for grants, grant samples, traps and ticks of the grants. This information will help you to get small business grants or any other grants in a more convenient way.

In case of availability of positive credit history to take the subsequent credit it will turn out much faster, in many banks and also will be provided soft terms and reduced interest rates. The packet of necessary documents depends on the required sum and accordingly more inquiries it is necessary to give. A standard kit of documents is documents of main activity (contracts with suppliers and buyers, the lease contract), constituent documents, and accounting records.

Often enough banks demand credit provision (pledge) is there can be an equipment or property (real estate, a car, the transport which is in the property of firm or belonging to the creditor). Also credit security can be the goods in turnover.

In most cases banks conduct pledge estimation independently. The pledge sum should cover the size of the credit and percent for all term. Thus the bank takes into consideration liquidity of pledge and a beret for a basis a maximum of 70 % of its assessment value more often.

Besides, conventional banks make the demand – to insure mortgage property. It is connected, including that according to the current legislation, in case of bankruptcy of firm situations when due to the law to bank assets can’t be collected from businessmen – proprietors of business. The property under pledge arrives on auction, and the bank has on it no preferential right. Experts advise not to be afraid of similar conditions, after all in the event that the borrower brings in time monthly payment he won’t have nay problems afterwards. Many banks give the loan to the client who leaves pledge in a form of, for example, machines, considering such the decision as more proof of gravity of the client.

Some banks have entered restrictions in issue of credits by the nature of activity and don’t give loans to the organizations which are engaged in extraction and realization of minerals, a gaming. Banks willingly credit production and service trade. But nevertheless there is one more circumstance is an unwillingness of banks to work with beginning businessmen. For credit reception the demand that the enterprise functioned not less than 6 month – year of work more often is needed, after all the most part of bankruptcies happens in the first year of work of firm.

But to receive start capital nevertheless is real. For example, in the event that the proprietor of the company is the skilled businessman, or having functioning at the moment of a capture of the credit or having experience of successful business dealing in the past. The decision for “beginners” the no-purpose consumer loan or the private loan can become optimum, it will be possible to address in bank later and to use small-scale business credit programs.

It is very important that government, despite this crisis is not abandoning to assist small businesses. And small business grants can be a true helper right now.

But, of course, you should understand that today the fight for small business grants as well as for other kinds of grants is more fierce. This is logical – more businesses need them. So before you start your battle for the small business grants, please visit this blog for more
details about grant industry.

Project financing as a method of creation of business

If you want o start business and don’t have enough money for it so here I want to tell you about another great way of business financing so I hope that this article will be very interesting for you. What the companies should do if for realization of the new project there is no enough financial means, and for attraction of a bank loan there is no adequate pledge? One of possible exits is project financing, but this product while is poorly extended, but it bears in itself high risks for banks.

Recently many companies implement scale projects on expansion of business, its modernization and reconstruction of the enterprises. Some of them for the purpose of a diversification of the business aspire to open the divisions working in industries new to firm.

Along with own means and investments of strategic investors for realization of all these projects business uses the resources involved from financial markets (IPO, release of debt obligations, bank loans). But to place shares or bonds at a stock exchange presume not all: it is rater long process and needs a lot of resources, not to mention that the company should have serious enough credit history or occupy a considerable market share in the segment.

As to a bank loan here all is standard enough and conservative: as repayment sources monetary flows from acting business are used, and as provision of borrowed funds assets of the enterprise available prior to the beginning of project implementation or the guarantor serve. But what to do if business is started from straight? It is improbable that the average bank will give financing exclusively under the enterprise business plan even if the borrower is rather solid company, for example, woodworking industry which has decided to be engaged in building. The risk of a non-return in this case will be rather great: the company never worked in developer industry, doesn’t possess corresponding experience and the personnel.

And still it is necessary to recognize that building commercial and a residential real estate is now rather profitable business. Therefore some banks which are having counted all pro’s and con’s, even more often agree to finance similar projects. This direction of risky lending rather new to the bank business is usual project financing.

Today the companies who are decided to be engaged in business can receive “longer” money — and under more low interests, than 2 – 3 years ago. Dynamics of growth of the given direction is rather big as it testifies to growing interest of the companies to this service — for last year the volume of a design portfolio has increased more than in 3 times.

The times when governments have been showering people with all types of grants have passed. At least for a while. But that does not imply that you should forget the idea of getting small business grants.

Everything is doable with smart approach; small business grants including.

Read this blog for more helpful tips about grants, how to apply for grants, grant samples, ups and downs of the grants. This information will help you to get small business grants or any other grants faster.

How to prepare for conversation with the venture investor

1. Test the idea in advance

The director for investments of fund of business angels AddVenture recommends before a meeting with the investor to talk with a great number of experts and potential customers, for example, at branch conferences. It is necessary to test the ideas. It is impossible, sitting in a tower from an ivory, to think up a wonderful product.

2. State project essence clearly and understandable

Before the investor would like to list through the multipage pages of business plan if it is available, it is necessary to explain an idea essence in briefly. At the same time to realize idea more accurately. Determination should be clear, short and clinging. Examples: “CatTube — YouTube about cats”. A’Insales is the system of construction of Internet shops in two cliques”. “Easyfinance.com is an on-line-control system of the personal finance — your personal financial officer”.

3. Speak particularly

From mere allegations like “we will earn on advertizing” investors for the last years have got a bit tired. Before convincing the investor in the potential of the idea, calculate “on fingers” on what it is possible particularly to earn. Some experts advise to prove figure analytics, similar projects (“We will have 5 million users, 1 % from them will purchase the expanded account for $10 a month, it will provide $50 000 revenues in a month”).

Don’t ignore world experience. It is necessary to tell that is already made: whether there is a prototype, preliminary arrangements with partners. Otherwise the presentation will look as project or the imagination torn off from the market. References to conversations with the guru in the given theme or heads of the big companies are important too.

4. Tell about a command

Any bright idea grows dim, if there is no command which is capable to embody it. Convince the investor that your command is like this. The managing director of fund notices that in a command should be not only specialists in one field, but also the person that understands component of business. So, if you open Internet shop, it is quite good to have in a command of the former manager of a retail network or supplier company. Necessarily refer to the previous experience of team members in business, in promotion of startups, in industry. He advises also to show that the command with a head has dived into the project, having put up the personal money, having left from the previous work, were spending nights at office …

5. Trust

The general director of fund DST the owner of few companies, advises: the businessman on interview to the investor in no event shouldn’t speak about an exit from business. Whether the investor will believe in your idea if you already start planning how you will throw this business?

It is very crucial that government, despite this recession is not leaving to help small businesses. And small business grants can be a true helper right now.

But, surely, you should understand that today the fight for small business grants as well as for other kinds of grants has become more fierce. This is natural – more businesses need them. So before you start your battle for the small business grants, please check out this blog for more
details about grant industry.

Small-scale business crediting

Today many banks assert that small-scale business crediting and it is one of their priority tasks. But in practice this statement is not implemented, after all to take the credit for a small firm is a very difficult task.

In a similar situation each party has arguments and explanations. Banks are confused with small scale business that makes difficult a real estimation of its fortune, besides; frequently there is no mortgage provision. Owners of small-scale business very often have no possibility to use credit programs of banks because of the overestimated interest rates at incommensurably short terms of repayment of a loan, and procedure of reception of the credit is difficult and long.

In addition, they don’t have start up capital or representatives of small-scale business don’t reflect a real financial situation in the reporting that considerably reduces probability of reception of money for replenishment of circulating assets or production modernization.

Unconditionally, present conditions of bank crediting of small-scale business are far from perfect. The authorities, understanding complexity of a situation, try to meet half-way business. In many regions government programs of crediting of small-scale business are already implemented. How much such support is effective the time can show. From the city budget the part of the expenses connected with reception of the credit in bank – in particular is compensated to businessmen, also is practiced partial subsidizing of the interest rate. Thus, small-scale business has possibility to receive means with smaller costs.

That fact isn’t called in question that first of all at registration of the credit the borrower pays attention to price parameters – the interest rate, term of repayment and the greatest possible credit amount, and also consideration term of application. The average rate in sphere of crediting of small-scale business constitutes 12-15 % in dollars.

Unconditionally, the rate size has regional features – percent on the country can differ on 1-3 points. However specialists notice that the tendency to equalization of credit rates in the market recently was planned. By the way, experts predict also general decrease in rates. So, according to Association of the banks, with 2002 for 2006 the mid-annual credit rate has decreased from 26,6 % to 16,2 %. The sum of crediting of small-scale business varies from 5 thousand to 1,5 million euro for the term from 6 months till 7 years.

Besides, it is necessary to consider about accompanying payments – the commissions which can increase monthly payment. Banks which specialize on crediting of small and average business can grant a delay of principal payment for the term from a month and about to one year, but don’t release from repayment of current percent. Before to take the credit, it is necessary to estimate the possibilities and problems with money return.

The times when governments have been showering people with all sorts of grants have passed. At least for some time. But that does not imply that one should forget the idea of getting small business grants.

Everything is possible with smart attitude; small business grants including.

Go to this blog for more practical tips about grants, how to apply for grants, grant samples, traps and ticks of the grants. This information will help you to get small business grants or any other grants in a more convenient way.