Page 57 - 597 Business Ideas You can Start from Home - doing what you LOVE! (Beginner Internet Marketing Series)

46 Your Idea. Inc.

It is a great program, but in today's economy, the money is not
coming freely. Many small businesses are finding it almost impos­
sible to get approval for even SBA loans. The demand for small busi­
ness loans is far exceeding the supply available, and the credit risk
for small businesses is just too high. Contrary to what many believe,
the SBA does not make direct loans-they work through traditional
banks or lenders (and therefore are feeling the crunch too). The SBA
is thereby able to provide financing to qualified applicants by guar­
anteeing a portion of the loan for the bank, but the bank assumes
the rest of the risk.

The SBA has a partnership with an organization called
SCORE (Service Corp. of Retired Executives). SCORE allows
you to connect with executives who volunteer their time
to advise start-up entrepreneurs. Visit their website at
www. score.org.

Investors

Angel investors may seem like a gift from heaven when you have
exhausted all of your other potential sources for money. Angel
investors are usually wealthy persons who invest money into a start­
up, looking for big returns. Their interest is in small businesses
with huge growth potential. They are often willing to invest a larger
sum of money than what can be collected from friends and family,
typically ranging from $300,000 to $S million. It can be a win-win
scenario-she has money to invest; you need money to spendl But
as with any lending arrangement, there are caveats.

The Catch: They Usually Want Partial Ownership

In exchange for their investment, angel investors typically
demand an equity stake in the business, ranging from 10 to SO per­
cent. You will have to decide whether or not you are willing to give