*OneMain does not make business loans.
Starting a business for the first time is an exciting venture, but, as any first-time business owner will tell you, securing the necessary start-up funding is an initial step every entrepreneur must take.
The idea of getting a first-time small business loan can feel intimidating. You may not know where to start, especially if the mere thought of writing a business plan makes you shudder.
Check out these tips for soon-to-be business owners, from where to find different types of small business loans to what to do when you land one.
Start with research
When it comes to securing a business loan, the most powerful research tool you have is, quite literally, at your fingertips: the Internet. It won’t take much searching for you to realize that you have plenty of funding options beyond standard bank loans.
Here are some ideas to get you started:
The U.S. Small Business Administration (SBA) recommends funding sources you may not have considered before, including business credit cards, microloans, crowd funding (such as GoFundMe and Kickstarter), even borrowing money from family and friends.
If you’ve perfected your pitch and are well connected (or know someone who is), angel investors can be another incredible source of first-time business capital.
Does your new business venture involve new technologies or will it benefit society in some way? If so, you may be eligible for a federal grant. Grants.gov is a searchable directory of federal grant opportunities. Applying for one of these grants can be a tedious process, but it’s free and may yield great results.
Another government source of small business funding are SBA microloans (which can be up to $50,000). You can learn more about how to apply for them here.
Speaking of microloans, if your business will help disadvantaged communities, non-profit microloans are another great option. MarketWatch has published an excellent list of non-profit microlenders [here].
Get (business) planning
Now that you’ve identified first-time small business loan sources, you’ll need to present your idea in a professional way that will attract and inspire potential investors. The way to do it? A business plan.
If you’re daunted by the thought of writing a business plan, you’re not alone! Most first-time business owners feel the same way. But don’t panic. Here are some tips to calm your mind so you can write a crackerjack plan and secure the loan(s) you need:
The SBA does a great job of breaking down how to write a business plan in two different formats: traditional (longer) and lean startup (shorter). The agency even provides fictional example business plans to review.
Writing a business plan doesn’t have to take forever, either. You can write a business plan — the core of it, at least — in a single day.
Once you understand the elements of a business plan, you’ll need to map out powerful content. These seven steps can help you get there.
After securing your start-up funding, high five yourself and start plotting how you’ll disperse it.
There’s inventory, employees, tools, marketing, workspace. The list goes on. However you decide to spend your small business loan, be sure to carefully map it out, invest in the basics, and avoid common mistakes.
Prepare for takeoff
Now that you’re well versed in the basics of startup funding, how to secure it, and the best ways to disperse it, go forth and pursue your entrepreneurial dreams! The loans are out there and the world is waiting for your idea.
*This article has been updated from its original posting on November 4, 2016. Stephanie Lo contributed to this article.