Sometimes invoice financing from a factoring company may not be available for a business owner. Companies without revenues and invoices, or maybe just trying to get formed will need access to other forms of capital. One very good option is the local community bank. Local banks are tasked to help small businesses. If the amount needed is fairly small, under $25,000, a business owner might qualify for a “signature loan.†The loan is made out to the company but the owner will be personally liable for the amount borrowed.
In order to secure a signature line of credit, proceed like a professional trying to get a loan. Put together a package that includes; information about the business, a list of customers that are lined up, show what money has been already invested in the business and most importantly – what is the capital for, and also the plan for repaying the loan. Then take this presentation package around to local banks. Do not be discouraged if a particular branch turns the concept down. Go to a different branch and try again. Ideally every borrower needs a “internal champion†at a bank, if the business idea is good enough. Keep going until the right banker, who believes in the business plan signs on and becomes willing shepherd the loan through the banking process. The use of the internal champion is one of the most powerful tools a business owner has for a chance at success.