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Finding Capital to Start your Small Business

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SBA's Online Business Chat

A live Q&A session with small business experts. Submit your question before or during the chat discussion. You cannot submit question after Closing Remarks for the chat. No registration is needed for the web chat.

Expert: Pravina Raghavan
Finding Capital to Start your Small Business

Pravina Raghavan

District Director, SBA's New York District Office

Thursday, October 11, 2012 8:00 PM

Pravina Raghaven is the District Director for the SBA’s New York District Office.  She has more than 15 years of experience in providing advisory services to businesses in the start-up, growth, expansion and maturity phases of development.  In that time, she completed over 100 Mergers and Acquisitions transactions and has advised companies on strategy, marketing, sales development, capital raising, mergers and acquisitions, divestures, outsourcing, joint ventures and partnerships, and international development. 

Prior to joining the SBA, Pravina was a Vice President with MTV and BET Networks in Content Distribution and Marketing where she was responsible for contract negotiations and marketing for 23 channels. Previously, she was a small business owner of a strategic advisory firm that assisted companies in their quest for growth.

Prior to owning her own business, Pravina was the Business Development Director for Misys PLC, one of the largest banking software companies in the world. She was also an associate at an investment bank, Broadview International, in London. Prior to Broadview, Pravina worked for seven years at AT&T in several finance and management roles, including her last five years as M&A Director for Europe.

Pravina has an MBA in Finance from Seton Hall University and a BS in Finance from the Pennsylvania State University. She has worked in over 15 countries around the world and is familiar with five languages.

Pravina is also a board member of Seton Hall University School of Entrepreneurship and a member of the International Executive Resource Group (IERG), National Association of Minorities in Communications (NAMIC), The Penn State Alumni Association, Women’s Bond Club of New York (WBC), Women in Telecommunications and Cable (WICT), and Venture Association of New Jersey (VANJ).

Looking for information on how to get the money to start your small business? Join Pravina Raghavan from SBA's New York District Office, for tips on various resources.

Please post your question below:

Note: There is not an audio format for the online chat, and no broadcast capability. SBA moderators retain editorial control over the online discussions and choose the most relevant questions for chat participants and hosts.

Chat Transcript

 

From:
KIm
Location:
Kent, WA
 

 

Hello- this is Pravina Raghavan, SBA New York District Director. I am honored to be here today with you. Unfortunately Jeanne Hulit had a scheduling conflict and can’t make it, but I am pleased to welcome you in honor of Women’s Small Business Month. Today is SBA’s second web chat session for a series focused on seeking access to capital for your small business. I look forward to answering your questions and sharing SBA’s resources and programs.
 
From:
KIm
Location:
Kent, WA
 
Question:
I would like to know if you have bad personal credit and do not really have any business credit started because you are new...how do you get grants/loans (especially for a minority woman)? 2-HOw do you get approved for a loan if you have nothing to start with. 3-Which loan place(s) are best to get qualified with low rates?
Reply:
Thanks for your question, Kim. Generally speaking, your personal credit can have an impact on your ability to get a loan when you don’t have any business credit. If you have bad personal credit, try to get that corrected. It will take time, so the faster you can get on track the faster it will become better. A good resource SBA has for potential minority owned business can be found here: http://www.sba.gov/sba-direct/article/3553
 
From:
Halisha Anderson
Location:
Everett, WA
 
Question:
What are some tips or suggestions you can offer as it pertains to finding the right fit (grants, loans) for your capital needs?
Reply:
Halisha, taking time to determine what the best grant or loan you need for your business is incredibly important. The option you choose should be based on a variety of factors, but SBA has business counselors around the country who can help and online resources where you can learn more about the nuances of SBA programs and search for what may be the right fit for you. Just click here: http://www.sba.gov/community/blogs/community-blogs/small-business-matters/grants-loans-break-through-myths-find-right-f
 
From:
jackie
Location:
,
 
Question:
My personnal credit is not so good. But the business credit is a-1 how do i go about proving the business credit, so i can get a loan or line of credit through the business, to help grow my business and get it back on track?
Reply:
That’s a great question, Jackie. Many business owners use credit to finance their companies, but using personal credit cards for business is a risky approach since you assume total liability, and if your company is sued or fails you risk losing personal assets and good credit ratings as well. One way you can limit that personal liability and build your business’ credit it is by incorporating your business and filing for a federal tax ID number. By incorporating, your company is treated as a separate being with its own tax registration.
 
From:
Shakira Tucker
Location:
Indianapolis, Indiana
 
Question:
What funding/grants are available for African American women trying to start their own business?
Reply:
Great question, Shakira. Though federal and state government agencies do not provide consideration specifically for minorities starting a business, there are a number of low-interest loan programs that help individuals obtain startup financing, and minorities are 3-5 times more likely to qualify for SBA programs than standard loan programs. SBA and the Minority Business Development Agency can also help you learn more about starting your business, putting together your business plan, and applying for loans. You can follow the following linke to learn more: http://www.mbda.gov/
 
From:
Kathy Smith
Location:
Owings Mills, Maryland
 
Question:
Where do I find or get the capital to start my business?
Reply:
Good question, Kathy. Historically women have not had equal access to capital and financial markets, but this dynamic is changing. One of the best things you can do is to educate yourself about potential funding sources as you look to start your business. An SBA counselor in your area is a great resource who can walk you through the potential options (http://www.sba.gov/content/find-local-sba-office). Also, you may want to check out the Women Accessing Capital program that is run through Women in Public Policy (http://www.womenaccessingcapital.com/programs-powered-by-wipp).
 
From:
Katie Boucher
Location:
Indianapolis, IN
 
Question:
As a young business woman starting out, what options for finding financing and investors would you suggest? I would like to start my business by next April and have good credit from student loans, car loan, and credit card but I am guessing I do not have enough credit history.
Reply:
Hi, Katie. Credit history is one of the factors lenders will take into account when processing your loan application, though not the only factor. Regarding funding, you should check out this blog from SBA about how you can find outside funding sources and expand your access to capital: http://www.sba.gov/community/blogs/community-blogs/small-business-cents/women-business-owners-%E2%80%93-how-expand-your-sources
 
From:
Leena Dalal
Location:
Fountain Valley, California
 
Question:
I am intrested in registring my company as women owned. Also, looking for funding to grow. Have all licensing to run the company. Please recommend some resources Thanks
Reply:
Leena, thanks for bringing up the topic of registering your business. This can sometimes be an area of confusion for business owners. While this hasn’t always been the case, there is currently no formal government registration process for women, minority, or veteran-owned businesses that differ from the normal registration process all businesses follow. In the past, the government monitored registration processes for certain business types, including women-owned. However, being a woman-owned small business can be relevant when contracting with the federal and state governments. You can learn more about these certifications here: http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/registering-woman-minority-or-veteran-owned-bus
 
From:
Lu Ann Petitt
Location:
Fletcher, NC
 
Question:
We would like to buy rental properties. We opened an LLC. How do we fund it? Is it better to get a small business loan or get a mortgage for the properties? Are there grants available? I have been very ill for 6 1/2 years and unable to work. My husband works and we have excellent credit. We are looking towards the future and real estate prices are so low right now that we really want to take this opportunity to start a business. Thank you! We appreciate any advice you can give us!
Reply:
Lu Ann, having good credit is always good and can help during the loan process. The best thing you can probably do is sit down with an SBA counselor to discuss your specific finances and how that will affect what the right fit is in terms of financing your LLC. Here is a link to our North Carolina District Office: http://www.sba.gov/about-offices-content/2/3127
 
From:
Beth Johnson
Location:
Bethel, Ohio
 
Question:
I have operated a puppy rescue for the last four years and have vetted and re-homed 485 puppies that were going to be euthanized in eastern Ohio county kill shelters. I was bootstrapping and spent nearly $10,000.00 of my own money so far - now cash flow is a problem and I need donations from private foundations and/or corporate funding. I don't have the $500.00 to file for my 501(c)(3) tax status so I am looking for a 501(c)(3)organization with a mission similar to mine to gain
Reply:
Beth, that’s a great cause you’re working for. The following blog from SBA walks you through all the steps you’ll need in order file for your 501(c)(3) status and start fundraising: http://www.sba.gov/community/blogs/community-blogs/small-business-matters/how-start-non-profit-organization I hope this helps!
 
From:
Anuraga
Location:
Alpharetta, Georgia
 
Question:
Hi, How to approach government department for grants? My business is related to renewable energy (Solar energy). I am into business from past 2 months. I need guidance on how to approach for grants and projects. Thanks Mrs. Anuraga
Reply:
Great question, Anuraga. SBA has a great program called the SBIR which looks at providing grants for small business who provide advanced technology solutions. It sounds like your company would be a great fit. More information can be found at www.sbir.gov.
 
From:
Pam Adams
Location:
Albuquerque, New Mexico
 
Question:
I am interested in having a food truck here in Albuquerque, but I have no idea where to begin. I have menus I have a logo I am polling to see if I am viable. (I believe I am) but how do I even begin to get funding. Is a business plan the only way to go?
Reply:
Pam, a business plan is essential to getting funding from lenders. They will want to see that your business has the potential to be profitable and sustainable, among other factors they consider. An SBA counselor could be a great resource to help you put that plan together.
 
From:
BJ
Location:
Houston, TX
 
Question:
Are there federal grants available to build housing for the elderly?
Reply:
The SBA does not administer grants, however, there is a very resourceful federal website you may want to visit: www.grants.gov.
 
From:
Tori
Location:
Detroit, MI
 
Question:
I would like to start a nonprofit for job training and job placement. Where do I begging?
Reply:
Hi Tori - please do not beg. The following blog from SBA walks you through all the steps you’ll need in order file for your 501(c)(3) status and start fundraising: http://www.sba.gov/community/blogs/community-blogs/small-business-matters/how-start-non-profit-organization
 
From:
Dianne Hoskins
Location:
Healdsburg, California
 
Question:
I am doing research for a new business that I am starting which coinsides with my current business of 15 years, DH Custom Sewing. It will be a sewing cafe which will be a community learning center as well as a design studio and have machines to rent for those who do not have the space to sew in their homes. My next step is to find a source of capital to get it launched. I have locations identified in Healdsburg. Can you guide me to capital resources?
Reply:
Dianne, it sounds like you have a good start in your plans. There are a number of sources for funding that you can explore, and the right choice will really depend on your individual circumstances. An SBA counselor in your area can help you assess your best options, but here is a link with more information about SBA programs geared towards women business owners: http://www.sba.gov/community/blogs/community-blogs/small-business-cents/women-business-owners-%E2%80%93-how-expand-your-sources
 
From:
Diana Cavender
Location:
Lebanon, TN
 
Question:
I am passionate about opening a maternity store in Lebanon, TN (other than big box stores, i.e., Walmart, JC Penney, Target there aren't any). My business plan is complete. I am thinking of going to a local bank as opposed to a national bank for a business loan. Thoughts/advice? Thank you, D
Reply:
Diana, there certainly are differences between local credit unions and banks, and selecting the best choice for you should be based on your needs as a business owner. On one hand, banks offer a wide range of services and are more accessible to customers on a larger scale. They are for-profit institutions that are owned by shareholders and designed to generate profit. On the other hand, credit unions typically have fewer branches and tighter access to their services than banks. They are not-for-profit and owned by their members and formed to supply credit to those members, who also serve as the credit union’s customers. Another difference between the two is the fee structure. Examining the importance of these differences will help drive your decision.
 
From:
Marguerite
Location:
, Vermont
 
Question:
I have good credit and a full-time job, but my personal income is only $10.50 an hour. I've had an SBA Loan about 10 years ago with collateral. But I do not have collateral now. What are the income requirements to qualify for an SBA Loan?
Reply:
Income is only one of the factors lenders will take into account when processing your loan application, and not the only factor. There are several other factors the bank will consider while applying for a loan, such as Character and repayment ability. SBA has business counselors around the country who can help you prepare your loan application and work with on potential options. A list of counselors can be found at www.sba.gov
 
From:
Gigi Willetts
Location:
Camden, South Carolina
 
Question:
What are the qualifications for getting capital for a small business?
Reply:
Thanks for your question, Gigi. Lenders generally look at a number of factors when assessing loan applications; some financial, some non-financial. They can be best summarized into 5 C’s: character, credit, cash flow, capacity, and collateral.
 
From:
Julie Lewis
Location:
Memphis, TN
 
Question:
Hi, Jeanne, thanks for taking my question. Our business has been functioning for almost 5 years, but in order to grow past the
Reply:
Julie, first, SBA loans are for for-profit business and we do small amounts. It sounds like the SBA 504 Loan Program might be a great fit for you and your small business. The loans are originated through a Certified Development Company, 10 percent is needed down and the loans are approved up to $5 Million. You can find more information by visiting http://www.sba.gov/content/cdc504-loan-program.
 
From:
MARCOEnterprises
Location:
Dallas, TEXAS
 
Question:
Funding for small businesses that have federal contracts?
Reply:
Thanks for that question. The CAPLines program is an excellent source for funding contracts. You can find more information by visiting http://www.sba.gov/content/caplines.
 
From:
Ty
Location:
Charleston, South Carolina
 
Question:
I would like to start a for profit gourmet line of goods. I'm starting this as a sole proprietorship. I have the business plan prepared. Is there a way to receive start up funding, with poor credit, and no collateral? I am a minority female.
Reply:
Thanks Ty. The best next step for you would be to reach out to your small business counselor. To find your nearest small business resource and get started, go to www.sba.gov/sba-direct.
 
From:
Diane
Location:
Benton, AR
 
Question:
I am opening a bakery in an old historic area of of a great small town. I have leased an old building that I love and the owner gave me permission to do whatever I would like on the inside at my expense. I have been working on the building so much that I have dipped into the funds needed for equipment needed. I need $3000.00 for a good used oven and a three compartment sink, how could I obtain a small loan to get these items needed?
Reply:
Thanks Diane for your great question. The Small Loan Advantage program, or SLA 2.0, would be a great resource to explore for your situation. These programs offer streamlined application processes for SBA 7(a) loans and is designed to encourage SBA lenders to make lower-dollar loans to benefit businesses. You can learn more about SLA at www.sba.gov/advantage.
 
From:
MaryAnn O'Neill
Location:
Hyde Park, Ma
 
Question:
How to Submit the right business plan for a loan
Reply:
Thanks MaryAnn. The SBA offers great advice for pulling together a business plan. You can find video tutorials as well as a great deal of information at http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/how-write-business-plan. In addition, the are business counselors who can provide in-person advice on the appropriate business plan. To find a counselor, go to www.sba.gov.
 
From:
Claudia Pinzon
Location:
Miami, Florida
 
Question:
Can government help us to find out how can we export to Latin american countries? And how to find a financial support for this operation? Thank you, Claudia
Reply:
Claudia, that’s a fantastic question. A U.S. Export Assistance Center is located in Miami and can assist you in this topic. You can find information for your local center here: http://www.sba.gov/content/us-export-assistance-centers
 
From:
Willae Ivory
Location:
,
 
Question:
If you are just starting a business, having no start up funds available and being unemployed, how do you obtain capital to begin a business?
Reply:
Hi Willae The best next step for you would be to reach out to your small business counselor. To find your nearest small business resource and get started, go to www.sba.gov/sba-direct. They can help guide you on setting up a business plan and figuring out sources of funding for your new business.
 
From:
April Campbell
Location:
,
 
Question:
We have an energy efficient business and have developed us a system that we can use in any business format and are interested in teaming with other women owned business to see how we can help each other here is our system (OUR SYSTEM) 1. Have the Retailer or any large agency agree to buy x amount of material or services from us. 2. Have the Manufacturer give me a PO for the cost of the supplies 3. Fill out the paper work so the Retailer or large agency cuts the Check to the Factoring Company 4. Fill out the Paper work so the Factoring Company agrees to pay the PO Financing Company and US once the Invoice is Approved 5. The PO Financing Company pays the Manufacturer 6. The Material gets delivered to the Retailer or agency and we do the work or just supply the material 7. The retailer approves the invoice for the amount of X(X = the total amount of the invoice) 8. This information goes to the Factoring Company 9. The Factoring Company cuts a check to the PO Financing Company and US for 80% of X ( The PO Financing Company gets the Cost of the Supplies they Bought plus 7% for there Cut this is usually 40% of the total value of of the invoice but can vary depending on the work to be done and the material needed) ( WE get the remaining 40% ) 10. 30 to 60 days later when the Retailers check is given to the Factoring Company they take 5% of of the total value of the invoice for there troubles and the Factoring Company gives US another check for 15% of the total value of the contract) This is the system I devised over a 3 year time frame. So my question is how do I take this system and grow it to a national then Global Scale . And Possabilly team with other women owned businesses. As you can see with this I am not limited finically by any means the only thing I need is a Major Company who wants to purchase something
Reply:
Thanks for your question, April. A great start with you might be to sit down with a business consultant at the nearest Small Business Development Center. You can get in touch with your local counselor by doing a local search for offices in your area at http://www.sba.gov/local-assistance.
 
From:
Kelly Campbell
Location:
Charlotte, North Carolina
 
Question:
Can you talk about Federal Grants?
Reply:
Hi Kelly - The SBA does not administer grants, however, there is a very resourceful federal website you may want to visit: www.grants.gov.
 
From:
Dora Church
Location:
Lomita, CA
 
Question:
Is a franchise loan easier to get financing?
Reply:
Hello Dora- Franchise options vary, but they often provide a great opportunity. The SBA has a wealth of information on franchises at http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/establishing-business/fra
 
From:
Elvira Grant
Location:
Sevierville and Townsend, Tennessee
 
Question:
I am about to open my own cafe in a growing tourist area. I have 7 years in experience of running a restaurant with 275 seating capacity. I have borrowed part at the bank for my construction loan, since I couldnt find an existing place suitable for my needs in the area. I am just 3-4 weeks away from openning, which means i will be able to turn the construction loan into a mortgage. Should I stay with the same bank or try to find better rates at other places, and what places should I look into?
Reply:
Great question Elvira! Banks are competitive, so we typically suggest you start with the bank you currently use and also shop around to make sure the rates you receive are competitive. For a complete listing of nearby SBA lenders, please visit your local SBA district website and you can also visit one of our business counselors who can with the application process both resources can be found at www.sba.gov.
 
From:
Sesula
Location:
PagoPago, American Samo
 
Question:
This may be out of your area, but maybe you can inspire or shine some lights in what's available in my territory. Does American Samoa have any SBA programs for women owned businesses funded by the federal government? Or how can i go about advocating for these opportunities for my women business owners community?
Reply:
Thanks for your question Sesula. We do have SBA offices in the American Samoa area, which you find here: http://www.sba.gov/local-assistance/AS/local-resources. Contact ones of those offices listed to get in touch with someone who can talk to you more about the opportunities available for women’s small business owners.
 
From:
Ms. E. Salak
Location:
Hillsboro, OR
 
Question:
I am starting an online service business that has very littlle start-up cost however, the main need for funding would be directed toward advertising . I need to get the word out for this much needed service. Is there a particular way to get this sort of help in funding ?
Reply:
Please work with SCORE or a nearby Small Business Development Center or Women’s Business Center. They should be able to assist you in seeking necessary funding options and also provide guidance on alternative methods of advertising. You can find the nearest locations at www.sba.gov.
 
From:
Pam Aborio
Location:
Island Pond, Vt.
 
Question:
I am not only a women but a disabled soon to be 65 year old woman. Are there grants available for someone in my position.
Reply:
Hi Pam - The SBA does not administer grants, however, there is a very resourceful federal website you may want to visit: www.grants.gov.
 
From:
Bonnie Martelon
Location:
Parker, CO
 
Question:
My credit is not great, but I need a small amount of money to grow my housekeeping business? Who/how do I find this money and where?
Reply:
Hi Bonnie- a great option for you might be to look into the SBA’s Microloan Program- this might be a great option for you. You can find more information at http://www.sba.gov/content/microloan-program.
 
From:
Amy Gordon
Location:
Los Angeles, CA
 
Question:
I do not qualify for an SBA loan or bank loan and I am in need of seed money to start the patent process. I have a very unique and patentable bath and body product idea and have a prototype of the unique packaging. I have considered crowdfunding websites, but fear that the idea could be copied or knocked off before I can get it protected. What are the risk factors involved with seeking money through crowdfunding websites?
Reply:
Amy this is a great question. SBA has a great blog about crowdfunding and its advantages: http://www.sba.gov/community/blogs/guest-blogs/industry-word/crowdfunding-can-help-you-sell-new-product-or-idea. Also, SBIC, which are venture capitalist funded by the SBA maybe another source of financing. You can find more information about that program at http://www.sba.gov/content/sbic-program-0.
 
From:
Alyssa Pfennig
Location:
Indianapolis, IN
 
Question:
Are there restrictions on what you can use capital raised for depending on the source? Where do you find more information?
Reply:
Alyssa- if you are referencing capital derived from an SBA-backed loan, there are limitations on what the funds can be used for. For a listing of these uses (for example a 7a Loan), please visit http://www.sba.gov/content/use-7a-loan-proceeds.
 
From:
Tee
Location:
,
 
Question:
Where can someone that have a score of 600 from past financial hardships such as a divorce get small business financing from?
Reply:
Hi Tee - Credit scores are looked at by SBA lenders, but please keep in mind there are several other factors the bank will consider while applying for a loan, such as Character and repayment ability. SBA has business counselors around the country who can help you prepare your loan application and work with on potential options. A list of counselors can be found at www.sba.gov.
 
From:
Mattia Oram
Location:
Ryan, IA
 
Question:
I am starting a woman owned repossession business in a very small community. I have never started a business and we are in need of working capital. We have all of the equipment necessary to start the company running. Does the fact that the industry I am working in is mostly male dominated provide any benefits when applying for loans or grants? This industry does not seem to fall under any of the industry categories that the SBA lists regularly so it is difficult to gather information.
Reply:
SBA-backed loans are made available to everyone. We encourage you to contact your local SBA District office to discuss options that might be a good fit for you and your business. The IA District can be located through www.sba.gov/IA.
 
From:
Selene Santos
Location:
Simpsonville, SC
 
Question:
Banks are not lending money. How do you find private investors?
Reply:
Selene- As the national economy recovers, banks are lending more. It maybe that you need to work with a business counselor to discuss financing options and you can find a counselor at www.sba.gov. In addition, the SBA’s SBIC Program might be a good program to look into. Find more info at http://www.sba.gov/about-offices-content/1/2890.
 
From:
Melvia Rouse
Location:
KIngsland, Ga
 
Question:
How I should I present my business to investors? Where can I find investors? My business is child-care based but relatively different because it will be located in a shopping center.
Reply:
Great question Melvia. Investors can be located through different venues, but a great place to start would be with the Small Business Development Center. You can locate your nearest GA SBDC at http://www.georgiasbdc.org/
 
From:
Angela Whitfield
Location:
Cleveland, Ohio
 
Question:
I am trying to find capital to start a business. I have 3 ideas and I am trying to narrow down to 1, at least for now. I want a transportation business, nail salon or a beauty supply store. Would the start up capital be different for each of them? Do you have to have money on hand to start? Do you have to have good credit to get the capital?
Reply:
Hi Angela - I would suggest speaking with a business counselor whoc can help you narrow down your options and find ways to finance your enterprise. Bookstrapping is a great option for business. Another resource is www.sba.gov. You can research different business types, business plans and utilize a start-up calculator.
 
From:
KIm
Location:
Kent, WA
 

 

It is now time for us to close the web chat session. Thank you so much for joining me and I hope the topics and answers we have addressed can assist you in starting or growing your small business. If we weren’t able to get to your question, please remember that SBA has many resources to help you learn about financing your business. To learn more you can seek out your local SBA offices to assist you in information regarding accessing capital.
 
SBA supported counseling and training makes a difference: Those who receive counseling and training are more likely to start a business, their businesses are more likely to survive over the ensuing years, and they are better prepared to seek financing and to plan effectively for future business growth.
 
Thanks again everyone. I had a great time answering questions and wish the best of luck to our women-owned small businesses!