Hablando de negocios
How to find investors for my small business
BY FVARGAS OCTOBER 18, 2021
Starting a small business can be challenging, but taking the next step and continuing to grow is often even worse. Therefore, thousands of businesses remain at a small standard until they disappear. Let's clarify that growing does not necessarily mean “the next thing” or is fundamental for everyone. There are those who choose to keep a small business or know their market and know that "growing" would be ending their business.
Investors for my small business: where to start?
If you have already decided that what you want is to grow with the help of investors , we explain some "tricks" that you can take advantage of. The Small Business Administration ( SBA ) provides information on potential investors in its financing programs.
What are SBICs and how to find them?
The first thing is to identify the Small Business Investment Companies ( SBICs ). These are private companies authorized by the SBA. The role of SBICs is to invest in small businesses in the form of debt and equity. At the same time, the SBA provides 50% funding. That is, for every $ 2 contributed by SBICs, the SBA gives $ 1 . With this money an investment bag is created.
How financing works
SBICs invest in small businesses through debt, equity, or a little of both. Debt is a loan that investors grant to the company and it must pay with any interest. Capital stock is ownership interest obtained by SBICs in exchange for provided financing. In general, the financing of investment companies is made for three years.
Are you eligible to find financing?
Before taking the first step, you must meet certain requirements : American company (at least 51% of assets must be in the United States). Being a small company . Being in an SBA approved sector to seek investors. Even meeting the requirements, there is more that you should take into account. An SBIC has its own indicators. In general, they access profitable companies with the necessary cash flow to pay interest. Find your small business partners Through the following directory , look for investors in your field or interested in your field to make an offer. Prepare your project well and have everything you need ready. Remember, you must be convincing and be prepared for any questions.