If you are planning to start your own small business, then you would probably not need millions of seed capital. As a ballpark figure, a more realistic amount of about 100,000 to 150,000 should be enough to get you going. However this small amount might be more difficult to come by as private equity firms and venture capital companies are not going to be too welcoming. So where can you go for a start up business loan?
Of course you can approach the traditional financial institutions to get a small business loan but this type of financing usually comes with a hefty interest rate and some form of collateral. Your best bet for financing of this amount is with the government. The government has small business loan program target at people like you who are interested in starting up their own business. Typically the government aid program will partner with major banks to set up the financial aid for small business owners.
Small business start up loans from the government work something like this The bank that is in partnership with the government with provides the financing for new small business entities with a much lower interest rate because the government guarantees up to 85 percent of the loan amount. If and when the small business owner defaults on the bank loan, the government has to be bear the amount and repay the bank the amount guaranteed.
Although it is easier to attain a small business loan in this manner, the government agency still needs to see some form of proof that you will be starting up a viable business. Among the documents that you need to provide for the loan to be approve are business plan, owners or directors profile and experience in the business, good credit records and your own start up cash. It is highly unlikely that the government will approve small business loans if you fail to provide proper evidence that you can successful run your business