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Your Business's Financing Profile

Most entrepreneurs consider their resource pool to consist of whatever personal assets they're willing to sink into the business, and whatever money they might be able to get through a local bank loan. Yet, a number of alternative (or additional) financing options may be available to you.

To assess whether your business can take advantage of any of these financing options, you should begin by realistically evaluating the investment profile and creditworthiness of your enterprise. The basic things to consider are:

• the stage of your business's development in the financial life cycle of that type of business (e.g., startup, developing, or mature)
• the appeal of your business and its operators, in the eyes of investors
• the amount of capital needed for your business
• whether personal financing can cover most of your needs
• whether insider financing can fill the gap between what you have and what you need
• whether bootstrapping can reduce your need for additional funds
• our quick pick chart showing the best financing options for businesses in different stages of development

Save Time Most financiers will request certain financial statements and a business plan from you before they are willing to invest in your business. In order to be prepared for this scrutiny of your business, your should make your assessment of the creditworthiness and investor appeal of your business before you develop a business plan. While the plan should reflect your personal business goals, keep in mind who your audience is, and draft the plan so that it sells your ideas to people who are in the business of making money.