Let’s face it. Money matters. You can't start, grow or simply exist in business without sufficient money to pay the bills and provide some income. Here are some questions you should answer as you consider starting or growing your business.

• How much do I need to either get started or grow my business?
• Will I use my personal money?
• Should I ask someone else for a loan?
• Can I apply for a credit card?
• Will a vendor or a supplier be willing to give me trade credit?
  [This usually means that you have an extended period of time to pay your bill usually 30 days from time of invoice.]
• To minimize costs, should I start my business in my home?
• If I use someone's money, will my business generate enough money to be able to repay the loan (principal and interest)?

Funding Your Business

Many entrepreneurs start businesses at home using their own personal funds. Some ask friends and family to provide the initial or ongoing capital. When your business has been established for a while, you may want to go to your local bank for a loan.

You Can Bank on It

Developing a relationship with your bank and your personal banker is important. If you decide to seek a loan from your bank, your personal banker serves as your advocate supporting your application before the bank’s loan committee. When you apply for a loan, you and your parents must co-sign the papers.

Before asking for a loan, you need to establish a savings or checking account. Banks generally prefer to lend to their existing clients who will bring the bank additional business -- other new clients or establish a number of accounts both personal and business. Once you have demonstrated that your business is successful, a bank may consider a line of credit or possibly a small commercial loan if you and/or your parents bank there.

Your Credit History is Your Rep

Finally, establishing and maintaining a good credit history is critical to getting money for your business. Always pay your bills on time and make sure that you periodically check your credit history. A credit report contains information on where you live, how you pay your bills, and whether you’ve been sued, arrested or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors who use it to evaluate your applications for credit. Your credit is like your name -- do not abuse it.

Free Credit Reports Available

The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months, from www.annualcreditreport.com.

Resources

Information about financing your business is available from SBA.

To test your business budget, try these interactive calculators:
http://www.bplans.com/contentkit/index.cfm?s=tools&affiliate=jaorg