As the saying goes.  Today I went with a client to an SBA lender meeting and some take-aways that I wanted to share from that meeting are:

  • Be willing to invest 15-20% of your own money into the business.  This means, if you are asking for $10k, then prepared to get $8,000.  No lender will feel comfortable investing in something that the founder doesn’t have “skin in the game.”  That means, if the founder doesn’t have whatever of their own money have to put into their project, then it implies that the founder isn’t convinced in the business’s success.
  • Have good credit.  This is mostly a gauge for lenders to determine how responsible the entrepreneur is.  For start-ups, there is no track record to base a lending decision on.  So the next closest track record is that of the founder.  Those with bad credit should consider having a co-signer.
  • Have collateral.  This is so that the creditors have something to get if things go south.

That said, sometimes, it does not take hundreds of thousands of dollars to launch.  This great infographic made by Anna Vital at shows the starting capital a few well-known companies started with.