Financing a start-up business or a purchase of a business is very difficult for a lender. At a minimum the lender will be looking for the owner to
- Have experience in the industry
- Inject a significant amount of money into the transaction
- Provide solid collateral for the loan
- Have the ability to live without a salary for at least six months
- Have personal resources if additional funds are required during start-up
- Have a strong credit history
- And, have a sound written business plan.
If you are thinking of starting a business or purchasing a business, DCU would suggest that you talk with one of the Small Business Development Centers listed at the bottom of this page. The SBDC's give you advice on starting or buying a business, the risks you will be facing, writing a business plan, marketing, finance, sources of capital, and so on. And the best part is that all their advice is FREE.
If you are starting a business or buying a business (or have been in business for 18 months or less) and you have a detailed written business plan, DCU will entertain your application for financing.
Why a Business Plan?
A business plan is an important tool for a new entrepreneur. It is your road map for success. The US Small Business Administration states on its web site: " A business plan precisely defines your business, identifies your goals, and serves as your firm's resume.
The basic components include
- a current and pro forma balance sheet,
- an income statement, and
- a cash flow analysis.
A business plan helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application.
Additionally, it informs sales personnel, suppliers, and others about your operations and goals."
Help in Writing a Business Plan
There are numerous resources to assist a prospective entrepreneur in creating a business plan. Books can be found at libraries and bookstores. Accountants and business consultants can help structure business plans. There are a number of non-profit groups dedicated to helping new entrepreneurs especially for minorities and women.
Two of the best sources for start-up assistance are
- the US Small Business Administration (SBA) and
- the Small Business Development Centers (SBDCs) in your state.
Both provide a plethora of information on starting and running a business including creating a business plan. SBA sponsors a business consulting group called SCORE (Service Corp of Retired Executives). Both the SBDC's and SCORE will give you one-on-one consultations about your business at little or no cost.
For more information about business plans and starting or buying a business call or visit the web sites of your local SBA and SBDC offices. For a listing of SBA and SBDC web sites and phone numbers, please refer to the Small Business Resources section below.
Small Business Resources
The US Small Business Administration (SBA), Service Corp of Retired Executives (SCORE), and the Small Business Development Centers (SBDC) can be valuable resources for both new and established businesses. They can provide information and counseling for little or no cost on all phases of business, from starting a business, to finding new markets, manufacturing efficiency, financing, and employee relations
US Small Business Administration
Small Business Administration Office Phone Numbers:
- Massachusetts – 617.565.5590
- New Hampshire – 603.225.1400
- Rhode Island – 401.528.4561
- Vermont – 802.828.4422
- Maine – 207.622.8274
- Connecticut – 860.240.4700
Service Corp of Retired Executives
Small Business Development Centers
To Visit the SBDC web site select the appropriate state:
SBDC Office's Phone Numbers
- Amherst – 413.545.6301
- Worcester – 508.793.7615
- Chestnut Hill – 617.552.2730
- Salem – 978.542.6343
- Fall River – 508.674.1929
- Springfield – 413.737.6712
- Pittsfield – 413.449.0933
- Minority Business Center – Boston – 617.287.7750
- Littleton – 603.444.1053
- Keene – 603.358.2602
- Manchester – 603.624.2000
- Nashua – 603.897.8588
- Rochester – 603.330.1929
- Plymouth – 603.535.2523
Rhode Island – 401.232.6111
Vermont – 800.464.7232
Maine – 800.679.7232
Connecticut – 860.486.4135