Many new businesses seek start-up capital, and if you are in the position of needing business start up funding, there are plenty of resources. Just know that money alone does not ensure a successful business. In fact, studies show the reason many businesses fail is two-fold - a lack of funding and/or poor management. So, brush up on your financial knowledge and get started.

Base your business startup funding on the amount of time it will take to turn a profit. For an estimate of capital needed, consider three months of capital to cover living costs, employee salaries, utilities, rent, advertising, supplies, delivery/transportation, taxes and insurance. Add these amounts and multiply them times the number of months it takes to return a profit, then multiply it times 1.25% to cover miscellaneous expenses. For more in-depth small business loans: startup funding education and training, see the following information:

1. Develop financial knowledge for startup small business loans.

2. Locate start up business funding mentoring and training.

3. Find small business associations for support and education with funding for startup businesses.

Action Steps for Sourcing Small Business Loans Online
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Find online or in-person training to obtain knowledge about startup small business loans

With so many options for startup funding, it is important for you to understand what money is available and how to get it. Other entrepreneurs offer a variety of services to help you gain the funding you want. It is a matter of deciding what training format works for you, and then locating the course you need.

I recommend: Startup Planet.com provides free mini-courses, live teleseminars, books, seminars, DVDs, audio programs, and software to teach you grounded tactics about beginning a business and successfully running your business. Training-Class.com has training courses in different formats.

Locate mentors for funding for startup businesses through education programs

Many education programs offer the option of a mentor/coach in addition to their courses. The opportunity to receive one-on-one help can make the difference for people who need direct contact and assistance with specific issues. Startup funding for small businesses programs can be industry specific or have a general business focus, it is your choice.

I recommend: For mentoring, teleconferencing, audio books, etc., see Start Up Company University.com. Trump University offers live seminars to coach you to success.

Find organizations that offer education courses for obtaining start up business loans

With so many small business associations and organizations available to help you, focus on the ones who offer education, training, and individual help. General information is a great starter, but you need someone who helps with questions or issues pertinent to your specialty. Minorities and people with disabilities have different options available to them, so investigate these associations for specialized information.

I recommend: For free training on start-up funding for small business, see the U.S. Small Business Administration for abundant resources. SCORE counsels small businesses and provides education. The Minority Business Development Agency provides sources, education and information. For articles and information to help people with disabilities understand small company startup loans, see eSight Careers Network.

According to the Small Business Administration, entrepreneurs seek small business loans startup funding for their projects, but often find it to be a difficult and challenging process. Entrepreneurs seek funding for their startup businesses to avoid using their funds and establish business credit history. Startup funding loan providers strongly suggest preparing financial documents proactively before approaching lending institutions.

Business owners seeking small company startup loans prepare fund usage forecasts for lenders since loans are based the business' financial health. Loan applications, business startup funding applications and startup business loans requests are reviewed for information related to the business' sales and the company's repayment ability. Startup businesses generally rely on their business' credit history.

1. Home equity loans are an accessible source for small business loan funding.

2. Unsecured loans allow recipients of small business startup loans approval without prior home or real estate collateral. A signed loan contract by the requester is the banks guarantee of the small business loan repayment of startup funding.

3. Secured business loans require collateral assets and payment arrangement contracts for startup small business loans or commercial startup funding.

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Use the equity in your home as startup funding for small businesses

Using any accrued home equity as startup funding for a small business is highly advantageous in several regards. There are not many extensive requirements for this type of business loan, however, it is recommended that there is sufficient equity built into the home's value and the requester has outstanding credit.

I recommend: Ask questions and be clear on contractual obligations when securing home equity loans to start a new business. Secure competitive rates when financing the loan. Your Equity streamlines the borrowing process, making it relatively easier to secure the loan. Regions Bank, a national lending institution, offers discounts for first time applicants and other premium services for small business startups.

Locate unsecured loan-granting institutions for company startup loans

Companies who loan funding for startup businesses and do not require collateral assets are ideal for entrepreneurs. For new businesses, this is preferred as it gives the small business owner a likelier chance of loan approval without the need to provide any collateral for the loan.

I recommend: Contact local resources in your area to find those institutions that do not require collateral assets to approve the loan. Hard Money Loans offer the option of an unsecured line of credit on start up loan financing. With Advanced Lending Group, you are offered the option to "customize" your loan, as they also have products available for all types of financial situations in relation to new business financing.

Use collateral assets to maximize your approval for startup business loans

Collateral assets value assessment can vary from lender to lender. Comparing annual percentage rates and repayment schedules can be a determining factor in which loan is chosen. Also, by determining which assets are of value can increase your chances of a loan approval.

I recommend: Companies like Fast Up Front Loans offer comparable rates and repayment schedules for collateral asset loans. Each collateral item should be assessed professionally before being presented to the bank for consideration. Tricon Leasing considers each asset for collateral, and based upon their assessment, offers a generous line of credit approval per loan.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Finding sufficient funding for the small business owner can be a difficult hurdle for the entrepreneur. Offset this by researching institutions, ensuring adequate preparation, asking questions, asking for referrals and recommendations and being diligent in all of your business dealings. According to Dun & Bradstreet, most businesses fail within the first three years of inception, primarily due to poor planning and unforeseen financial circumstances. Proper planning and a healthy financial projection is the key to business success.

If you want to start your own business, then you need to understand small business loans start-up funding key terms. Whether you seek a traditional loan through a bank or want to look into other funding options, you're likely to run across terms that confuse you. Given the wide array of options for start-up funds, there's a lot to learn—especially if this is your first business venture. Here are a few of the most common start-up terms you'll come across.

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SBA

SBA is short for Small Business Administration, which is an independent agency of the federal government designed to assist in small business concerns, including loans. For the variety of SBA loans, the SBA is the guarantor and the loan is made by private lenders. SBA loans are often given to businesses that would otherwise not qualify for a loan.

I recommend: Credit Infocenter discusses SBA loans and who qualifies for them.

Prequalification

Prequalification means your business is pre-approved by the SBA for a specific loan amount before you even approach a lender. To prequalify, the SBA looks at the business owner's credit, character, experience and perceived reliability.

I recommend: FranFinancing.com explains the SBA's prequalifcation program and eligibility requirements.

Personal guarantee

A personal guarantee happens when a business owner assumes personal responsibility for loan repayment if the business itself is unable to repay.

I recommend: Inc.com offers an article on the basics of personal guarantees.

SBICs

SBICs are small business investment centers that are licensed by the SBA. They are privately operated investment firms that offer start-up financing for small businesses.

I recommend: The National Association of Small Business Investment Companies (NASBIC) explains its purpose and its venture capital and start-up financing process.

Venture capital firms

For businesses that need to grow quickly or need large start-up sums, venture capital firms are good places to seek funding. Venture capital firms are private organizations that contact wealthy individuals and collect investment money from them. That money is collected and put into a fund that is then invested in several different ventures or businesses.

I recommend: HowStuffWorks offers a good article on venture capitalism.

Credit score

Lenders use a credit score to determine how risky it is to loan to you. This score evaluates your credit payment history, financial strength, business history and how much new credit you desire. A score of 365 is poor, while a great score is 850. Typically, a score of at least 680 is required by lending institutions.

I recommend: ClearviewPublications.com discusses the differences between personal and business loans and how business owners' credit scores come into play.