FREQUENTLY ASKED QUESTIONS
Have a question about the SBDC and small business in Minnesota?
This is the page for you!
Check out the categories below for the most frequently asked questions by our clients.
There are very few grants available for a for business. Most grants are awarded to nonprofit organizations or local governments, not to privately operated companies. There are a few exceptions such as high technology businesses.
To determine financing needs, you should first prepare a business plan with a complete set of financial projections, including a balance sheet, income statement, and cash flow statement. With a properly completed business plan, you will have identified your funding needs. Banks will lend to some business start-ups if they are satisfied with your business plan, your level of equity investment, the collateral you have to pledge to the loan, and your credit history and experience.
Once you have taken care of your building and equipment needs, you must also have enough money on hand to cover operating expenses for at least a year. One of the leading causes of business failure is insufficient start-up capital. Consequently, you should work closely with your SBDC consultant or accountant to estimate your cash flow needs.
When you apply for the loan, you must provide a personal financial statement, projected financial statements and a cohesive, clear business plan that supplies the name of the firm, location, production facilities, legal structure, and business goals. A clear description of your experience and management capabilities, as well as the expertise of other key personnel, will also be needed.
Repayment ability from the cash flow of the business is a primary consideration in the loan decision process, but good character, management capability, collateral, and the owner’s equity contribution are also important considerations. All owners of 20 percent or more of the business are usually required to personally guarantee business loans.
There are very few grants available for a for business. Most grants are awarded to nonprofit organizations or local governments, not to privately operated companies. There are a few exceptions such as the SBIR or STTR programs that fund the research and development of technological innovation, Child care resources seeking to assist with the start-up or expansion of daycare providers in Minnesota.