Last week Columbus Startup Week provided attendees an excellent opportunity to “fill up” on a number of opportunities designed to assist businesses. From workshops on marketing and how to use analytics to manage business growth, to one of my personal passion areas, access to capital.
Many entrepreneurs continue to look for capital to help move their business forward, whether it’s a startup looking for space, or an existing business who wants to add locations or increase staff.
A team of experts participated on the panel representing Huntington Bank, Forge Columbus (who heads up Kiva Columbus), Rev1 Ventures and the Small Business Development Center. Each of these experts agreed that having a business plan is one of the first and most important steps. This plan is your initial opportunity to not only convey to others what your plans are for your business, but it also serves as YOUR strategic plan that outlines your operations and financial position, and ensures that those are in alignment with your business’ vision, mission and goals.
Take-away: Understand the role of the 5 C’s of credit: character, capital, capacity, collateral, conditions.
It is important to understand why there is a need for capital and how each lender deals with addressing the need. There are many financing options available to businesses today, from traditional lenders to micro-financing to crowdfunding. The question the business needs to ask is how much, what is the use, and the terms of paying the loans back to the lender.
Many traditional lenders will want the business to inject “equity” into the deal process, oftentimes by securing the loan with collateral. If you are an existing business, a traditional lender will want to look at your most recent three years of financial statements and year-to-date statements, and projections with detailed assumptions (especially if it’s a startup business), personal tax returns, accounts receivables and accounts payable, to name a few.
Crowdfunding platforms such as Kickstarter, GoFundMe and Idiegogo are all the rage right now because, as the name suggests, you are asking a “crowd” to fund your project or venture by investing small amount of money, usually through the internet. These are platforms by which you build your campaign and provide a “reward” for investing in your company or a “stake” in your company.
A new “kid” in Columbus is Kiva Columbus. Kiva’s objectives are to: 1) increase access to capital for all small businesses; 2) use technology to lower the cost of loan capital for borrowers; and 3) create a deeper connection between Kiva’s million lenders and borrowers they support.
Successful borrowers enjoy zero-percent, no-fee loans, and can borrow initially up to $10,000. The borrower makes regular weekly or monthly payments electronically through PayPal, which is why they are fee-free.
In order to get started, contact any of these great organizations. They are all designed to assist small businesses in their growth!
- Columbus Chamber of Commerce
- City of Columbus Small Business Concierge
- Ohio Small Business Development Center at Columbus State Community College
- Ohio Department of Development
- SCORE Columbus
- Rev1 Ventures
- Finance Fund
- Kiva Columbus