Looking For Financing?

Where will the money come from?

One of the most frequently asked questions we get at the New Hampshire Small Business Development Center is how to go about locating and obtaining financing for a small business, and that includes new businesses and existing small businesses. The NH SBDC does not have direct access to business grants or loans, but we can help and advise you through every step of the loan process. A key component of the loan process is developing a Business Plan, which will be used when you apply for a business loan from a lender.

Quite often, the majority of financing for a new business comes directly from the business owner’s own sources of money. Friends and family members are also a common source of funds for someone starting a new business.

The limited availability of small business grants

Business loans and other financing options

Business loans can be sought in a variety of ways. Numerous local banks and other lending institutions have small business lending programs, offering loans from a few thousand dollars up to millions of dollars. In New Hampshire, a business owner may seek out micro-loans, commercial loans, commercial loans with government guarantees, alternative lending programs and/or financing from venture capitalists or angel investors.

Besides obtaining a business loan, you may want or need to obtain other financing, such as equity financing. Some new businesses are financed totally or in part through various kinds of equity financing, which simply means that others buy a share of the business. There are several types of equity financing but, generally speaking, those who invest in your company do so in order to get a return on that investment—whether a modest return or a large return. Your friends and/or family members, for example, may invest in your business in exchange for a small return on their investment, while venture capitalists will make riskier investments in new businesses in order to see a large return on their money. An “angel investor” is an individual who may invest his or her own wealth in your business. The Equity Financing section gives more details on the various types of equity financing.

Next: First Steps