Sources

There are a number of sources to consider for raising capital. You might begin with the bank where you keep your personal accounts and already have a working relationship. Most banks have a special department for small business loans, and they can provide guidance on how much you can reasonably expect to borrow and how to apply.

You might also use the assets you already have as the basis for a loan. For example, you might consider taking a home equity loan, which could be substantial if your house has increased in value. The risk you run, however, is that if you default on the loan because your business fails, you may lose your home as well. If you borrow the money from family or friends, be sure that you have a formal agreement in place, ideally reviewed by a lawyer, so that the repayment terms and conditions are clear to everyone.

One source you should always check for loans and for helpful information about small businesses in general is the Small Business Administration (SBA), and particularly its website, www.sba.gov. There you will find information about the types of loans available, who qualifies for them and the procedures for filing your loan application.