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Luckily, funding is much more available than it was even a year ago. Simply do a search for “Small Business Loans.” Many small businesses begin without seed money from third parties such as banks. The owners more often tap their friends and relatives or go into business with a partner. Two things stand out for me.

First, going to a bank for a loan is good therapy since the bank wants to be convinced that your concept is viable and will produce a return on your investment within the time you set out in your business plan. So, the bank will help you tighten up your business concept and your Cash Flow Projections. But, beware. Sometimes banks don’t even look at your plan if you are unable to put up collateral. Bankers are just too busy to spend much time on small loans. They are really looking for start-up loans in excess of $50,000 and a relationship that might quickly expand your borrowing though lines of credit and other means to over $100,000 in a short time.

Second, going into business with someone you already know can be trickier than dealing with a bank. Feelings always get involved if things do not work out as planned. So, our advice is to have every loan agreement in writing and spell out exactly how and when the parties will be repaid and how and when management will be paid as well. Unraveling bad loans with friends who have different recollections of what they initially agreed to can become expensive and take a lot of you time away from running your business.