Banks are often the first, but rarely the last, stop for financing a Colorado business start-up. Data presented by an author on the topic shows that bank loans account for less than one-tenth of capital for new companies. Entrepreneurs on the search for money to get their ideas off the ground have a number of other places to look for help.
One of the more popular alternatives to the traditional bank loan is a bank loan funneled through the Small Business Administration. The SBA guarantees a portion of the loan, which means better terms and access for start-up company owners. Funds can be used for commercial real estate transactions, for example. However, a number of conditions apply that may make other sources more attractive.
For instance, the use of personal savings can provide a quick infusion of cash without the hassle of document requirements and credit checks. Informal loans from friends can come without the fees associated with other loans, and repayment terms could be much more flexible. In the age of social networking, an entrepreneur can also seek investors through crowd-funding without giving up too much ownership of the start-up company.
Funding is a critical part of any small business, and it generally requires the preparation of a number of documents. Owners may find it challenging to manage this degree of paperwork without professional assistance. This is especially true with a new business, where the owner is also having to focus on regulatory compliance. An attorney can help prepare documents, review loan terms and protect against legal pitfalls.