In our last couple posts, we’ve discussed considerations for funding your own venture and for reaching out to “family, friends and fools” to get your startup off the ground. Great options for some, but what if you don’t have a trust fund or a rich uncle? The bank is a logical next step, but not all loans are created equally. This time we’ll take a look at three standard options for bank loans and what you’ll need to secure them.

Microloans
+ What it Gives You: This is just what it sounds like: a small sum of cash provided by a public or private lending institution. This amount could range anywhere between $5,000 — $50,000, and can cover any business need you might have.
+ What it Takes: Though less stringent than many other types of loans, requirements will likely include a high credit rating and a specific amount of tangible assets available for collateral.

Small Business Administration Loans
+ What it Gives You: An SBA Loan (7a, 504, etc.) is arranged through the Federal government, and *guarantees* some degree of funding to any small business through a traditional lending institution — often at very good interest rates.
+ What it Takes: Above all, time! Since these loans are guaranteed, you won’t be turned away — but you might be turned off by the wait. Depending on your situation, the lengthy application process may take longer than you (or your business) can stand.

Equipment Loans
+ What it Gives You: When the money you borrow is going directly toward something that can be “collateralized,” your loan is seen as less risky to the bank, so they can afford to offer you more. Equipment loans can range in the Millions of dollars in some cases.
+ What it Takes: Collateral is an obvious priority here, but due to the large sums of money changing hands, that’s not all. Requirements typically include excellent credit, capital for a down-payment, a solid business plan and a proven track record.

Making Your Decision
The most important thing to consider in your search for a bank-backed loan is that the bank is in the business of avoiding risk. The more evidence you can present to make your business a safe “bet,” the easier it will be for the bank to approve your loan. So the question is this: what sort of evidence you can produce — and how much?

When you first consider starting a business, it’s easy to get carried away with the “what if” that comes with outside funding.

“What if our first office was large enough to impress large clients?”
“What if we could start by hiring all of the top industry professionals?”
“What if we didn’t have to risk our livelihood?”

These aren’t just dreams. They’re valid considerations; definite possibilities. A sizable investment in your company’s foundation could give you a great head start. And depending on your area of expertise, it might be absolutely necessary.

But “what if” you can do it yourself?

It’s not without it’s own dangers, but if you have the necessary amount of personal savings to fund your startup, writing a loan to your own new business venture just might be the way to go. Here’s a few reasons why:

Urgency
When you’re spending your own money, the ticking clock is loud and clear. You touch and feel every dollar as it leaves your hands. It’s not for the faint of heart, but the sense of urgency this instills in your daily business can provide priceless motivation. It’s not just your new business on the line, it’s your immediate financial future.

Speed
The time it takes you to launch your business could be the difference between success and failure. All too often, a small business with all the right ideas and resources meets its demise due to its reliance on pursuing startup capital. When you hold the purse-strings, the only thing you’ve got to wait for is confidence.

Simplicity
There’s nothing more cut-and-dry than relying on yourself. The legal process is significantly less complicated. Your risk is self-contained. And the best part — when you succeed, you keep it all for yourself.

So how do you know if you’re prepared to finance your small business yourself? In the end only you can decide, but an experienced small business professional will help you get started by assessing factors like your initial overhead and the profit potential of your business. Though the process is much easier than arranging outside funding, it’s still important to work with a small business attorney to assure your arrangement is set up to protect you and your business as you move forward.

Now what if you made an investment in yourself today?

“ONE MAN…” might be a great way to start a movie preview, but it’s no way to start a business. Far fewer American dreams are built on a single pair of shoulders than the movie industry might have you believe. In the long run, more often than not, it’s the great team-builders that rule the day. In other words, when your small business starts facing big decisions, your most important choice might be the company you keep.

Small Business Lawyer
Incorporating a business isn’t just the first step toward legally operating your company — it’s your first opportunity to seek out a long-term legal partner. As your business grows, you’ll want a well-rounded attorney who can meet your various small business needs as they arise, so don’t take this decision lightly. You’ll want to fill this role before your business even gets off the ground.

Banker
For legal and financial purposes, you’ll want to begin treating your business as a separate entity from yourself (even if you’re a sole proprietor) right from the beginning. Once you’re equipped with a state-issued Tax ID number, you’ll want to talk to a Banker to get your corporate accounts in the books. These may include loans, checking, and credit card accounts, depending on the specifics of your business.

Accountant/CPA
Tax season might only come once a year, but the task you’ll face in properly managing and tracking your finances is a year-round responsibility. Since the decisions you make in the way you manage your money can drastically effect your tax premium, you’ll want to connect with an experienced Certified Public Accountant (CPA) as soon as possible. Try to seek one out within your first month of running the business.

Insurance Agent
The incorporation process can protect you as an individual, but your business needs its own safety net to stand up to the elements. Your insurance agent will make it their mission to cover your assets — with policies in general liability, worker’s comp, key man insurance, business disruption and more. Just as it is for the other important things in your life, a good insurance plan for your business can be the key to a good night’s sleep. — so the sooner you meet your agent, the better.

Business Consultant
It’s dangerous to steer the ship alone when you’re caught in the eye of the storm. To ensure you stay on course for success, you’ll want a strong business consultant watching over your operations from outside the organization. By combining an outside perspective with a wide array of business knowledge, a good business consultant can help you set your goals, plan your business, maintain your focus and realign as necessary along the way.

Marketing Consultant
Many entrepreneurs make the mistake of viewing marketing as an expense — the fact is, it’s an investment. From the foundational elements that establish your brand to the overall strategy for finding and engaging your target audience, a good marketing agency or consultant will act as an extension of your company — using their expertise to help you reach your business goals.

Running a business isn’t easy, but a trusted group of advisers can make it a lot less overwhelming. Just remember, you can answer every question the world will ever throw at you — all you’ve got to know is who to ask.

A lot of entrepreneurs ask us why we started SmallBizLaw. The truth is, we did it for the same reason YOU’RE starting a business — we had a dream. With a background in both law and entrepreneurship, we saw a considerable disconnect between two worlds. There were no legal outfits specifically equipped to serve the unique needs of Florida entrepreneurship law. Our dream was for that problem to go away, so we developed a solution — and we named it SmallBizLaw.

Bigger Isn’t Always Better
The larger corporate law firms are geared toward major corporate clients — towering office buildings, scores of attorneys and massive conference rooms. And if all of that’s not enough to scare away a first-time entrepreneur, the services are priced to match. So what’s a small biz to do?

Do It Yourself: Good for Oil Changes, Not for Law
Some first-time business owners turn to the BYOL approach — Be Your Own Lawyer. Unfortunately, whether you’re guessing from scratch, reverse engineering legal documents from your last employer, or downloading templates online, there’s a good chance “do it yourself” will be doing yourself more harm than good. From incorporating a business to everything that comes after, you’ll want to make sure you’re doing the right thing for YOUR business. The legal system doesn’t force you into templates; it’s built to be customized to your needs. In practically every aspect of business law, there are classifications, considerations and alterations to be explained, discussed and declared to make sure your legal standing is sound. There’s absolutely no substitute for personal, one-on-one contact with a Florida-licensed attorney.

Where We Come In
It almost sounds like a “can’t live with ‘em, can’t live without ‘em” scenario, doesn’t it? That’s why SmallBizLaw was founded. We provide the best of both worlds: affordable legal services for entrepreneurs and small business owners with one-on-one, personal consultation. We keep our rates low by limiting our overhead — providing our services 100% online. We connect with our clients with all today’s technology — offering contact via email, phone and even live Skype video conferencing. And beyond our legal offerings, we bring a wealth of business advice to the table. Just because it’s legal, doesn’t mean it’s good for business. We’ll make sure you’re on the right side of the law, but we’ll also help you get to the right side of the balance sheet.

Fulfilling the Dream
Today, SmallBizLaw offers affordable legal services throughout the state of Florida, all through one easy-to-use website. We’re the nation’s first e-law firm, and we’re proud to say we see our services making entrepreneurship law easier every day. Put simply, we offer the custom law services an entrepreneur deserves at the price they can afford to pay. Because just like you, we’ve got a dream. But OUR dream is making YOURS come true.

So you’ve decided you’re ready to run your own business.

That’s a tough enough call for most, but for you, it’s just the first of many. With every step down the road of entrepreneurship, you’ll face dilemmas that could break the average 9-5er. Now here’s a prime example. Would you rather:

a) put your blood, sweat and tears into starting your own business, or
b) take the risk of investing in one that’s already up and running?

“Starting a business” sounds as easy as flipping a switch, but it might be the hardest endeavor you ever undertake. Building a name, a client base, and a company will take unimaginable efforts. You’ll use time you never knew you had, money you never dreamed you’d see and skills you never thought you’d learn. But you’ll never be at the mercy of someone else’s past. At the end of the day, you can look back on it all and say what Sinatra said, “I did it my way.”

You might not be considering a buy-out for what sounds like a sensible enough reason — you don’t have the cash. But the fault in that logic is an important one — this business is bigger than you. It’ll take much more than just your own time, toil and money to make your business grow and thrive, and that starts at the beginning. A venture capitalist or angel investor might be one of the first and most valuable members of the entourage you’ll have to build around yourself to succeed. Also consider that though it may cost less initially, starting your own business is by no means cheap, and will likely meet or exceed the cost of a buy-out before you reach your goals.

With the challenge of the initial investment aside, buying a previously-owned business can be an attractive option — but make sure the business is a good buy. Are you buying into a solid foundation? A brand with equity? A great team? If the answers to these questions are yes, then this might be your best bet. There’s much less risk involved with buying an already great organization than trying to form your own — despite how dreamy it might sound to “do your own thing.” Dropping that ego might be a multi-million dollar move.

No matter which option you choose, the fundamental rules of running a great business are still the same. Plan thoroughly; it’s closest thing to predicting the future. Be ready to change your company to meet the changes around it; Darwinism works here — evolve or die. And always strive for perfection; you might just end up with excellence.