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Financing

There are limited funding sources available for new and existing businesses. The following links can assist you in finding the type of assistance that is best for your business. Some options available are government guaranteed loan programs, micro-lending and tax credits for expanding businesses.  Your best bet is to get very familiar with Bootstrap Financing, meaning using your own money (savings, family loans, friends, etc.) to finance your business.

With the tightening of the credit market, you may also have better luck getting a business loan with your local lender, rather than trying to get a government-backed loan.  However if your lender is unable to approve your loan, you may ask if the lender can consider your request under the SBA loan guaranty program. Under this program, the SBA can guaranty up to 85% of a small business loan; however, the lender must agree to loaning the money with the SBA guarantee.

You will still need to contribute a substantial amount of your own money to put down towards a loan!  Unless you have something extremely innovative and revolutionary, chances are you will have a challenging time receiving any sort of angel investing or venture capital financing.

Loans and Other Programs

Small Business Administration SBA Loan Guarantee Programs. Under the SBA 504 program, the SBA can guaranty up to 85% of a small business loan; however, the lender must agree to loaning the money with the SBA guarantee. The lender will then forward your loan application and a credit analysis to the nearest SBA District Office. After receiving all documentation, the SBA analyzes the entire application, then makes its decision. The process may take up to 10 days to complete.  Get the application here:  http://www.sba.gov/localresources/index.html. Upon SBA approval, the lending institution closes the loan and disburses the funds.  To be eligible, a business must be operated for profit and not exceed SBA’s size standards.

Rural Community Development Resources – offers a microlending loan program for qualifying Yakima County businesses.  The Microloan Program provides small, short-term loans to small business concerns as well as not-for-profit child-care centers. The SBA makes funds available to specially designated intermediary lenders (RCDR in Yakima County), which are nonprofit community-based organizations with experience in lending as well as management and technical assistance; these intermediaries make loans to eligible borrowers. The maximum loan amount is $35,000; the average loan is about $13,000.

Yakima County Resources and Tax Credit Programs for Expanding Businesses and Manufacturers

Washington State Tax Credit Programs

Grants

There is a misconception that there are government funds available to finance the start up of a business.  We’ve seen the infomercials and workshops advertised that if you pay a fee, attend a class or buy a book, you will have the key to FREE money.  Unfortunately there is no such thing as free money.  If it sounds to good to be true, it probably is.

The fact about grants is they are not readily available and those that might be out there are difficult to obtain, especially if you are looking to completely finance your start-up capital or operating costs.

If you are a non-profit or a for-profit in certain fields such as research and development or technology, there may be some resources available:

Read ‘The Myth of Free Government Money’