Financing

It is common knowledge it takes capital to start and run a business. What you may not be aware of is exactly how much is needed or where you can obtain the necessary funds. The easiest way to fail is to be under financed. As a safeguard, you should line up your maximum credit limit; then, if you need it, it will be there.

You should plan your financing very carefully to ensure success. You must have a realistic overall view of your start-up costs. You also need to allow enough money for you and your family to live on anywhere from three months to a year depending on the nature of your business.

The best person to help you with this planning is your banker. Take great care in choosing a bank and a banker. A strong relationship with a bank from the very beginning will be one of your most valuable assets.

Your banker will have a good working knowledge of the economic and business picture in the community. He may be able to draw on his experience to give you information on area business trends, marketability of your product or service, and provide sound practical advice for beginning your business. Once your business is in operation, your banker can provide continuing service and advice on such matters as retirement plans, accounts receivable, financing, expansion financing, loans and trusts.

A banker can assist you with obtaining the funds needed for your business. There is usually a limit, however, to the amount of money a bank will loan a prospective business person. Most banks would prefer to see a personal investment of one-quarter to onehalf of the money needed before approving the remainder of a loan. If you do not have this much available money, do not be discouraged. Some programs through the Small Business Administration Loan Program might be available to you. Other financial assistance for start-up and expanding business can be obtained through the Brownwood Economic Development Corporation and the Brownwood Industrial Foundation, Inc.

Before you meet with your banker to discuss financing, it is important that you have a good written business plan. This should include information concerning your personal background, including education and training; work experience, special skills, personal financial records, real estate owned, references, and projected income and balance sheet. See page 13 for more info and assistance on writing a business plan.