New business ventures
Entrepreneurs in Florida and other parts of the country often say that gaining access to start-up capital is one of the most difficult parts of getting a new business up and running.
It can be difficult to qualify for traditional bank loans without established income streams or assets that can be collateralized; and venture capitalists interested in rapid returns may be unwilling to sit idly for years as a business goes through its nascent stages.
Financing
Opportunities are generally fleeting by nature. And entrepreneurs hoping to gain a march on their competitors sometimes choose to fund fund new business ventures with credit cards; or other easily available sources of capital. They may feel that high interest rates are a decent exchange for quick access to needed cash; or they may plan to refinance their debt at lower rates once their business is established enough to qualify for a conventional bank loan.
Launching a business can also be financed with funds borrowed from friends or family members. Entrepreneurs sometimes take out home equity loans or second mortgages to get their commercial ventures off the ground.
Loans
Professional investors are often hesitant to lend to entrepreneurs without a track record of business success, and it may be easier for business owners to qualify for government loans from the Small Business Administration. However, while SBA loans may have more flexible underwriting guidelines, they also require copious amounts of documentation and have strict reporting requirements.
Business Attorneys with start-up company experience may be able to help entrepreneurs to avoid poor financial decisions by reviewing financing documents and comparing their terms and conditions with those offered by other providers. Attorneys could also caution business owners about the risks of becoming financially obligated based on projected future income.