Financing your start-up - tranche your funding requests!

<h1>Financing your start-up - tranche your funding requests!</h1>Author: <a title="Joseph Lizio" href="http://www.articlesbase.com/authors/joseph-lizio/86443.htm">Joseph Lizio</a> I recently read a forum post where two young entrepreneurs (still in college) were seeking over $1 million for their new start-up, small business.  While their business may be a great idea with huge potential – they essentially priced themselves out of the market with their $1 million funding request. While this business may actually need the $1 million to get to profitability – I can almost guarantee that it does not need all of those funds right now – at startup.  So, why seek them? I know that it is easier on the business owners to go out and get one, all inclusive loan or investment – but from the other side (the lender’s or investor’s side) – it is just too much risk and will never get funded. This business would be better off staging its request based on immediate need.  Example, this business may only need $100,000 to get it through the end of the year.  So, only ask for the $100,000.  Then, as the business approaches the year’s end, start seeking additional funding.  At this point, the business would have some type of track record – either sales and/or revenue or contracts in hand from solid customers – both of these (revenue or contracts) will open many more doors for this business – leading to more financing at better terms for the business.  Or, the business could have at this point generated some financial assets like accounts receivables, purchase orders or even credit card receipts that it could use for collateral to secure additional funding – meaning better terms, better rates and much faster approvals. I realize that it is much easier and lower risk from the business owner’s perspective to get all the money need right now – plus, seeking capital is very time consuming taking away needed time in the business.  But, from the other side – those with the money – it is just too risky – asking for more than you need immediately is the surest and quickest way of hear that dredged ‘NO”.  If your small business needs financing, why set it up to fail as your goal is to move forward.  Don’t set yourself up for the impossible by asking for too much – first prove that you can manage your debt or equity capital. Tranche your requests and I can guarantee that you will quit hearing “no” and start getting the “yes” you deserve.About the Author: Joseph Lizio holds a MBA in Finance and is the founder and owner of Business Money Today - <a href="http://www.businessmoneytoday.com"><a href="http://www.businessmoneytoday.com" target="_blank">www.businessmoneytoday.com</a></a>Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/small-business-articles/financing-your-startup-tranche-your-funding-requests-1355570.html" title="Financing your start-up - tranche your funding requests!">Financing your start-up - tranche your funding requests!</a>

I recently read a forum post where two young entrepreneurs (still in college) were seeking over $1 million for their new start-up, small business. While their business may be a great idea with huge potential – they essentially priced themselves out of the market with their $1 million funding request.

While this business may actually need the $1 million to get to profitability – I can almost guarantee that it does not need all of those funds right now – at startup. So, why seek them?

I know that it is easier on the business owners to go out and get one, all inclusive loan or investment – but from the other side (the lender’s or investor’s side) – it is just too much risk and will never get funded.

This business would be better off staging its request based on immediate need. Example, this business may only need $100,000 to get it through the end of the year. So, only ask for the $100,000. Then, as the business approaches the year’s end, start seeking additional funding.

At this point, the business would have some type of track record – either sales and/or revenue or contracts in hand from solid customers – both of these (revenue or contracts) will open many more doors for this business – leading to more financing at better terms for the business. Or, the business could have at this point generated some financial assets like accounts receivables, purchase orders or even credit card receipts that it could use for collateral to secure additional funding – meaning better terms, better rates and much faster approvals.

I realize that it is much easier and lower risk from the business owner’s perspective to get all the money need right now – plus, seeking capital is very time consuming taking away needed time in the business. But, from the other side – those with the money – it is just too risky – asking for more than you need immediately is the surest and quickest way of hear that dredged ‘NO”.

If your small business needs financing, why set it up to fail as your goal is to move forward. Don’t set yourself up for the impossible by asking for too much – first prove that you can manage your debt or equity capital.

Tranche your requests and I can guarantee that you will quit hearing “no” and start getting the “yes” you deserve.

Joseph Lizio holds a MBA in Finance and is the founder and owner of Business Money Today - www.businessmoneytoday.com

Rate this Article:

0 / 5 stars - 0 vote(s)

Re-Publish

Article Source: http://www.articlesbase.com/small-business-articles/financing-your-startup-tranche-your-funding-requests-1355570.html

Article Tags: small business, financing, startup, funding, loan

Related Videos
Related Articles
Ask / Related Q&A

Play

How To Handle Finances When You Are Married

Play

How to Obtain a SBA Loan

Play

How to Own Finance Commercial Real Estate

Play

Learn Business English Vocabulary for Finance and Accounting

Play

Sources of Finance for a Business

Latest Small Business Articles
More from Joseph Lizio

HTC touch S1 Triband Smart Phone ----a perfect clone smartphone from agoodseller

By: Andy | 01/12/2009
In addition to the previous articles, we are now going to discuss about the additional features and advantages of using the HTC S1phone. There are many benefits in using the said mobile phone. Here are some of those mentioned benefits of having the HTC Touch S1 as your mobile phone.

What's Wrong With My Paper Folding Machine?

By: Jeff McRitchie | 01/12/2009
It happens to everyone: at some point, you're going to run into trouble with your paper folding machine. You're probably wondering just what the heck is wrong with your machine and how you can fix it. This article will look at three common problems experienced by paper folder users and give you some tips on how to fix the problem.

What's New For School? The GBC Pinnacle 27 Laminator

By: Jeff McRitchie | 01/12/2009
With school back in session, perhaps you're in charge of buying a new laminator for your school's workroom. After all, your school is probably going to be laminating posters and maps and signs during the new school year, plus it's always kind of fun to buy new school supplies.

The Top Four Things You Need to Know About Unibind Binding

By: Jeff McRitchie | 01/12/2009
Unibind is one of the most popular binding methods around today and it is easy to see why. When you use a Unibind machine, you're guaranteed to get great results every time because not only are the machines user-friendly, they produce high-quality documents that look great. If you are interested in the Unbind binding system, there are four things you should be aware of before heading out to get your new machine. To find out what those four things are, please continue reading.

VeloBind Strips For Beginners - Choosing the Right Strip For Your GBC Velobind Binding Machine

By: Jeff McRitchie | 01/12/2009
If you're interested in GBC's VeloBind binding system, perhaps you need some guidance about what types of strips you should buy. Determining which ones are the right ones to get can be a bit confusing, especially if you're new to binding. How do you know if you need the hot knife strips?

Taking a Look at the Unibind XU138

By: Jeff McRitchie | 01/12/2009
In a world in which plastic comb binding rules, it's nice to have more elegant options available. One of these is the Unibind binding system. Unibind offers an entry-level machine - the Unibind XU138 - which is a good choice if you'd like to explore this type of binding without breaking the bank. Unibind makes your documents look like a real book with minimal effort. To find out more about this great binding method, please continue reading.

It's Easy to Bind With Unibind Supplies

By: Jeff McRitchie | 01/12/2009
Unibind binding machines are some of the easiest binding machines to use. Plus, they offer one of the most sophisticated binding styles available, thanks to Unibind binding spines. But did you know there are actually several different types of binding supplies you can use with your Unibind system? This article will take a look at what supplies you can use with your Unibind machine. Let's take a look.

Taking a Look at the Unibind ST1025 Binding Machine

By: Jeff McRitchie | 01/12/2009
Unibind binding machines are well-known for being easy to use in addition to providing some of the best-looking binding you could ever see. The Unibind lineup has several different machines that can bind anywhere from one to 48 documents at once, so they are great for both large and small jobs. However, if you need a higher capacity binding machine, the Unibind ST1025 is a machine that warrants a look. This review will fill you in on all you need to know about the Unibind ST1025.

Pay-For-Performance: May Save Your Employees

By: Joseph Lizio | 23/11/2009 | Small Business
Still facing the realities of this recession? Contemplating laying-off employees while knowing that doing so will further hurt the business? Using pay-for-performance plans may just save your employees and better position your business for the recovery when it finally arrives.

Financing your new business: Orders vs. Cash

By: Joseph Lizio | 17/11/2009 | Entrepreneurship
Most new business owners waste unnecessary time in trying to raise capital before starting their business. What they end up doing is wasting time and money. There are other ways; essentially building the business first then seeking financing.

The One Key to Business Success! - And three simple ways to do it

By: Joseph Lizio | 09/11/2009 | Entrepreneurship
Want the one key to ensure your business success? Find it here – it may be simpler then you think!

Taking debt now does not mean it is forever

By: Joseph Lizio | 02/11/2009 | Small Business
Banks turning you down but you don’t want to use those seemingly high priced alternative financing companies to get capital for your business? There are ways to use these products (for a short period) to get what your business wants and needs right now.

The Fallacy of Bank Lending

By: Joseph Lizio | 27/10/2009 | Small Business
If banks really want to compete and grow though increased customer acquisition and market share, then they will quit ignoring small business customers. It is a true fallacy of banks to continue to ignore this important and very large market segment.

Financing your start-up - tranche your funding requests!

By: Joseph Lizio | 19/10/2009 | Small Business
One fatal mistake that nearly all new small businesses make when seeking capital is asking for too much up front. You must lower the risk by demonstrating your business and capital management skills. Find out how …

Tapping Friends and Family for Small Business Financing

By: Joseph Lizio | 13/10/2009 | Entrepreneurship
Most new business owners shy away from their friends and family (F&F) when starting their new business. They usually do so because they know that their F&F do not have the money to invest. But, these same F&F may have more than capital to help aspiring entrepreneurs.