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Special programs for the business start up

If business works already at least six months then there is a possibility to take a loan in other banks under the joint program from the European Reconstruction and Development Bank. Rates under such programs start from 17-20 % in a dollar or euro currency. If means are necessary on purchasing of the equipment, real estate and a car, it is necessary to bring to 30 % of advance. The maximum crediting period is till five-seven years, a credit amount — to $3-5 million or their equivalent.

Means are given by many banks, both on replenishment of circulating assets and on purchasing of basic funds. However, if in the second case it is possible to count on the maximum credit period for “injections” in circulating capitals banks give money only for a year-two.

Also in all cases it is necessary to provide the money received on credit with liquid pledge. And if the equipment, real estate or a car is on credit acquired, it can appear insufficiently and it is necessary to pledge something else — real estate or the car. Moreover and at that cost which will be exposed by the bank appraiser.

Bank’s severe selection:

For reception of the credit the businessman should give impressive quantity of documents: from the registration certificate and the inquiry on movement of funds under bank accounts to the reporting for the last half a year-year and the plan of financial receipts for the term of credit reception.

New or “developed” business it is even more difficult: the bank demands the developed business plan which will explain why these goods or service will be on sale is better and will make profit in a year-two. It is very probable that to the borrower beginning new business will suggest to finance on 25-30 % of the project for the personal means and the remained 70-75 % — at the expense of the credit. Will analyze cost efficiency of the project captiously — the decision depends on it. If the bank comes to a conclusion that profitability of the project won’t allow the borrower to serve the credit no credit will exist basically.

The estimation of mortgage property is conducted by bank and paid by the borrower. And it is quite probable that assessment value of apartment, office or the equipment will be essential below expected. So banks aspire to secure themselves in case of credit non-payment — that even at urgent sale of pledge on knockdown price money for its repayment has sufficed.

Some banks are ready to support the businessman-borrower — offer so-called “credit vacation” for using first year-two the credit. During this period the client can not repay the credit indebtedness.

The times when governments have been showering people with all sorts of grants have passed. At least for a while. But that does not imply that one must forget the idea of getting small business grants.

Everything is possible with wise attitude; small business grants including.

Go to this blog for more helpful tips about grants, how to apply for grants, grant examples, traps and ticks of the grants. This info will help you to get small business grants or any other grants in a more convenient way.

Jack Danny got tired from constant change of a place of work and he has decided to begin the business. Living in suburb, he saw that in district all time there are faults with deliveries of the bakery goods. Here he also has decided to open a bakery. However, having constituted the business plan, Jack has understood: he can cover with own forces only 15-20 % of all costs. Therefore it was necessary to go to bankers.

In words all banks were ready to give money and as has reached business — in one have told” unpromisingly “, in the second they at all don’t credit such business branches and in another the bank agreed to borrow a maximum of 70 % of the necessary sum. Having thought, I have offered partnership to one of friends, and missing 50 % all of us took on credit. However, we will try to extinguish it as soon as possible because to give every year 35 % to bank — it is very unprofitable”, — Jack tells.

If it is necessary to receive pair of hundreds thousand dollars for a business “start”, really, it is necessary to work fairly for it. Someone from banks agrees to give the credit of the state of emergency, working exclusively in service trade and someone — under export-import transactions and someone — to only non-polluting business.

Besides, the bank will demand liquid pledge and will credit, most likely, under the high rate and also foreign currency credits are accessible only to those who already performs export operations.

Whom they give money to?

From the first thirty of banks small-scale business crediting is declared at least by half. But beginning businessmen in the ranks of the clients are ready to see only few of them. However, in the first case the specialist of bank has refused to name even rough credit conditions. All dares exclusively in an individual order, after project studying.

In one of the banks the credit is given both to start new business and on expansion of already working one. The maximum amount — 0,5 millions dollars can reach a crediting period of seven years. The rate is attractive enough: 11,75-14,5 % in dollars and euro. Unconditionally, pledge is required: the real estate, a car, the equipment, even the deposit will approach. Though, the kind of provision and definitive conditions all the same depend on that how much perspective credit managers will consider the business project.

Other banks agree to credit, if business works not less than one-two years, a minimum — half a year. By our estimations, in crediting of new clients today actively and purposefully are engaged no more than 10 banks. Business startups “only are interested to credit the majority in the event that the company and the businessman already have another, core business”, — the head of department on development of small and average business explains.

It is very important that government, despite this crisis is not leaving to help small businesses. And small business grants can be a true helper today.

But, surely, you should remember that today the fight for small business grants as well as for other kinds of grants is harsher. This is logical – more businesses need them. So before you start your fight for the small business grants, please visit this blog for more info about grant industry.

How to prepare for conversation with the venture investor

1. Test the idea in advance

The director for investments of fund of business angels AddVenture recommends before a meeting with the investor to talk with a great number of experts and potential customers, for example, at branch conferences. It is necessary to test the ideas. It is impossible, sitting in a tower from an ivory, to think up a wonderful product.

2. State project essence clearly and understandable

Before the investor would like to list through the multipage pages of business plan if it is available, it is necessary to explain an idea essence in briefly. At the same time to realize idea more accurately. Determination should be clear, short and clinging. Examples: “CatTube — YouTube about cats”. A’Insales is the system of construction of Internet shops in two cliques”. “Easyfinance.com is an on-line-control system of the personal finance — your personal financial officer”.

3. Speak particularly

From mere allegations like “we will earn on advertizing” investors for the last years have got a bit tired. Before convincing the investor in the potential of the idea, calculate “on fingers” on what it is possible particularly to earn. Some experts advise to prove figure analytics, similar projects (“We will have 5 million users, 1 % from them will purchase the expanded account for $10 a month, it will provide $50 000 revenues in a month”).

Don’t ignore world experience. It is necessary to tell that is already made: whether there is a prototype, preliminary arrangements with partners. Otherwise the presentation will look as project or the imagination torn off from the market. References to conversations with the guru in the given theme or heads of the big companies are important too.

4. Tell about a command

Any bright idea grows dim, if there is no command which is capable to embody it. Convince the investor that your command is like this. The managing director of fund notices that in a command should be not only specialists in one field, but also the person that understands component of business. So, if you open Internet shop, it is quite good to have in a command of the former manager of a retail network or supplier company. Necessarily refer to the previous experience of team members in business, in promotion of startups, in industry. He advises also to show that the command with a head has dived into the project, having put up the personal money, having left from the previous work, were spending nights at office …

5. Trust

The general director of fund DST the owner of few companies, advises: the businessman on interview to the investor in no event shouldn’t speak about an exit from business. Whether the investor will believe in your idea if you already start planning how you will throw this business?

It is very important that government, despite this recession is not abandoning to help small businesses. And small business grants can be a true helper right now.

But, surely, you should understand that today the fight for small business grants as well as for other types of grants is harsher. This is logical – more businesses need them. So before you start your battle for the small business grants, please make sure to check out this blog for more info about grant industry.

Small-scale business crediting

Today many banks assert that small-scale business crediting and it is one of their priority tasks. But in practice this statement is not implemented, after all to take the credit for a small firm is a very difficult task.

In a similar situation each party has arguments and explanations. Banks are confused with small scale business that makes difficult a real estimation of its fortune, besides; frequently there is no mortgage provision. Owners of small-scale business very often have no possibility to use credit programs of banks because of the overestimated interest rates at incommensurably short terms of repayment of a loan, and procedure of reception of the credit is difficult and long.

In addition, they don’t have start up capital or representatives of small-scale business don’t reflect a real financial situation in the reporting that considerably reduces probability of reception of money for replenishment of circulating assets or production modernization.

Unconditionally, present conditions of bank crediting of small-scale business are far from perfect. The authorities, understanding complexity of a situation, try to meet half-way business. In many regions government programs of crediting of small-scale business are already implemented. How much such support is effective the time can show. From the city budget the part of the expenses connected with reception of the credit in bank – in particular is compensated to businessmen, also is practiced partial subsidizing of the interest rate. Thus, small-scale business has possibility to receive means with smaller costs.

That fact isn’t called in question that first of all at registration of the credit the borrower pays attention to price parameters – the interest rate, term of repayment and the greatest possible credit amount, and also consideration term of application. The average rate in sphere of crediting of small-scale business constitutes 12-15 % in dollars.

Unconditionally, the rate size has regional features – percent on the country can differ on 1-3 points. However specialists notice that the tendency to equalization of credit rates in the market recently was planned. By the way, experts predict also general decrease in rates. So, according to Association of the banks, with 2002 for 2006 the mid-annual credit rate has decreased from 26,6 % to 16,2 %. The sum of crediting of small-scale business varies from 5 thousand to 1,5 million euro for the term from 6 months till 7 years.

Besides, it is necessary to consider about accompanying payments – the commissions which can increase monthly payment. Banks which specialize on crediting of small and average business can grant a delay of principal payment for the term from a month and about to one year, but don’t release from repayment of current percent. Before to take the credit, it is necessary to estimate the possibilities and problems with money return.

The times when governments have been showering people with all types of grants are over. At least for a while. But that does not mean that you must get rid of the idea of getting small business grants.

Everything is doable with nicely balanced approach; small business grants including.

Read this blog for more practical tips about grants, how to apply for grants, grant examples, traps and ticks of the grants. This info will help you to get small business grants or any other grants easier.

If you want to start you own business and are looking for the money capital you should know that state gives grants only to the perspective business and those that can be useful for the state, too. That is why you should be a well acknowledged organizer you make a great business plan and organize everything so it looked perfect for your investors.

The company is concentrated on the strengths and exclusive features, but in a separation from tendencies of development of an external environment that leads to falling and destruction.

D.Miller (1990) has formulated four trajectories of organizational development getting the organization in a situation of “effect of Ikara»:

* Designers — the organization builds the activity on exclusive engineering-design achievements, develops strategy of improvement of quality and economy on costs and is imperceptible for itself sooner or later starts to ignore opinion of the clients concerning issued goods.

* Builders — the companies, having gifted leaders and well organized personnel, develop strategy of expansion and appear involved in such business sector where they have weak idea. It leads to inefficient wasting of their internal resources.

* Pioneers — the organizations having strong research divisions and the advanced kinds of a product, developing only the strength. As a result appear hostages of futuristic projects of the chief designers and inventors.

* Direct-sales representatives — the organizations with the developed marketing capabilities, a wide market outlet and a known trade mark. Are concentrated on development of the named qualities therefore lose the purpose of the existence. Quality of goods inevitably suffers, and all functioning is concentrated round servicing of orders.

Decisions, basic for the enterprise, it is possible to find by means of technology of a benchmarking. This concept has come from sphere of ground measurements where bench-marks (benchmark) name a point from which lines of heights are counted. The benchmarking in management is a loan of experience from other spheres of activity. Henry Ford has offered an assembly line of cars after acquaintance to technology of works on the Chicago slaughterhouse. In 90th firm management Boeing has conducted research of systems of the organization at the enterprises of the best manufacturers of techniques worldwide. As a result of elimination of separate elements of own organization the firm has reduced a cycle of assemblage of planes with 18 till 8 months.

The modern benchmarking is revived by firm of Xerox which has entered this concept for comparison of management methods, product output and rendering of services. The benchmarking is performed by the analysis and comparison of product samples of own enterprise with goods of others.

Modern strategy of development should connect following factors reasonably:

* knowledge of external possibilities and dangers,

* knowledge and development of internal potential,

* search of ways of achievement of a demand of possibilities of the company,

* aspiration to change the external environment.

The times when governments have been showering people with all sorts of grants are over. At least for a while. But that does not mean that one must forget the idea of getting small business grants.

Everything is doable with smart approach; small business grants including.

Go to this blog for more helpful tips about grants, how to apply for grants, grant examples, traps and ticks of the grants. This info will help you to get small business grants or any other grants in a more convenient way.