Funding for a new business
Jeff, I am seeking funding for a new start up. Total amount would be approximately $160,00. That is equipment purchase and funding/working capital for the first year. Potential income for a full year is around $300,000.00. I have a business plan and a start-up cost sheet plus a projection of revenue for 2 years. If I were able to get a grant for 10% of the funding request can I use that for the down payment requirement? Any help/advice is desperately needed! Boyd Nobles
The answer will depend your lender. Some lenders will be fine with you using grant money as a down payment for the loan. However, many lenders will not see that as you risking anything into the business. They want to see you have something on the line and have some “skin in the game” so that they feel comfortable that you’ll do what it takes to make the business a success. Owners not having capital in the business is considered a risk. You should ask your potential lender directly if they would accept those funds because they’ll ask you where your downpayment is coming from.