The question of how best to finance start-up expenditures is practically universal. In recent years many people have gone to the equity on their homes. I have written about why not to use credit cards. In that post I suggested that if you have never been in business before, the only other source of funds is to borrow from family and friends. I said “lenders will turn you down if you apply”.
Well, don’t give up on the banks. AllBusiness.com has a new series of articles on business loans — what to expect, what to look out for. These articles all make the point that if you do go out looking for financing, go to the bank where you already do business. This is your best chance for getting funding from a bank. I still maintain that if you haven’t owned a business before, this is a tough course to follow. But “It’s free to ask” almost always applies.
So if you’re going to go ask, I highly recommend that you read Commercial Financing Rates and Costs. Go visit your banker armed with an understanding of rates and fees for business loans. The lowest interest rate may not be your best deal.