elevateMN

Elevate Educational Series Ep. 5: Financing Your Business

Episode Summary

In this episode, Sarah and Michelle discuss various financing options for your business, focusing on business grants, loans, and other financial supports. They provide practical advice on managing your financials, improving creditworthiness, and building relationships with financial institutions.

Episode Notes

Hosts:

• Sarah - Business Development Manager, Economic Development Commission, Kandiyohi County
• Michelle - Economic Development Professional, Mid Minnesota Development Commission

Key Topics Discussed:

1. Business Grants:
   • Understanding that business grants are rare and often very specific to certain projects, industries, or business owners.
   • The importance of staying informed about available grants and applying when applicable.
2. Operational Support and Investors:
   • Deep diving into your business plan and financials to improve revenue and reduce expenses.
   • Considering investors for operational support, which could include family members, former business partners, or other trusted individuals.
3. Loan Options:
   • Both organizations offer revolving loan funds to support businesses.
   • Emphasizing the importance of building a relationship with your bank or financial institution and shopping around for the best fit.
4. Personal Finance and Credit:
   • Working on personal finance and credit history as they impact your ability to secure business loans.
   • Understanding that improving credit history involves timely repayments and consistent financial behavior.
5. Five C's (or Seven C's) of Credit:
   • Capital: The money you can invest in your business.
   • Collateral: Assets that can be leveraged in case of business closure.
   • Capacity: Your ability to manage personal and business finances.
   • Character: Your reputation for paying bills on time and maintaining good relationships.
   • Context: The market demand and competition for your business.
   • Conditions: Terms of the loan, including interest rates, loan length, and other requirements.
6. Building a Strong Foundation:
   • Setting up your business for success by understanding financials, creating a sound business plan, and thinking strategically about your business context.

Summary: In this episode of the Elevate Podcast, Sarah and Michelle explore the critical topic of financing for businesses. They discuss the challenges and opportunities of securing business grants, loans, and investor support. The hosts provide practical tips on improving personal finance and credit history, building relationships with financial institutions, and understanding the key factors that lenders consider. They emphasize the importance of setting up a strong financial foundation to ensure the success and longevity of your business.

Hosts: Sarah and Michelle
Production: Economic Development Commission, Kandiyohi County; Mid Minnesota Development Commission

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