“The Future of America” Welcome to “The Future of America”

Financing “the act of obtaining or furnishing money or capital for a purchase or enterprise” -dictionary.com

Equity vs. Debt Financing Equity: Money raised in exchange for a share of ownership in the business. Equity financing allows a business to obtain funds without incurring debt, or without having to repay a specific amount of money at a particular time” Debt: borrowing money that must be repaid over a period of time, usually with interest. The lender does not gain an ownership interest in the business, and debt obligations are typically limited to repaying the loan with interest. http://www.sba.gov/financialassistance/borrowers/resources/basics/FINANCING_TYPES.html

Loans & Grants Loans – (typically a debt type of financing) Grants Tax- Exempt Bonds Venture Capital – (Equity) http://www.business.gov/finance/financing/

Small Business Loans Sources:-Local commercial bank of lending institutions -Government-backed Loan Loan Programs: SBA Loans (small business admin ), Energy efficiency loans, Export assistance loans, Rural business loans, and etc…

Small Business Loans Typical items for any small business loan application: Loan application form Personal Background Resumes Business plan Personal credit report Business credit report Income tax returns Financial Statements Bank Statements Accounts receivable and accounts payable Collateral Legal Documents

start finding Government Grants Federal government does not provide grants for starting and expanding a business  Grants from the federal government are only available to non-commercial organizations, such as non-profits and educational in areas such as medicine, education, scientific research and technology development. Legit and best place to start finding Government Grants http://www.grants.gov/

Tax- Exempt Bonds Tax-exempt bonds are debt securities issued by a state or local government development agency on behalf of a private business. Once issued, tax-exempt bonds are soled in the open market or purchased by investors or financial institutions. Interest income earned by the bond purchaser is exempt from state and local taxes, which allows the lender to pass savings to the borrower in the form of lower interest rates. Tax-exempt bonds are similar to conventional loans. Bonds are not grants. Borrowers have to pay back the bond’s principal plus interest to the bond. I get the bond -> sell in the market to finance my business -> then I pay back the bond’s principal + interest on the bond. Advantage: NO TAX!

Seed and Venture Capital Seed stages: very early, early, growth Venture Capital: cash investments in exchange for shares in the company Congress created the Small Business Investment Companies (SBIC) -Program to help small U.S. companies raise capital. http://www.sba.gov/aboutsba/sbaprograms/inv/esf/index.html?cm_sp=ExternalLink-_-Federal-_-SBA

SBA Financing What is Small Business Administration loan? Government-guaranteed loans designed to help give small businesses that may not otherwise qualify for credit get the funds they need. Provide more flexible terms than conventional loan options (allows for longer finance term with different payment options) Qualifying for an SBA loan is easier You may be able to borrow up to 100% of your financing needs http://www.bankofamerica.com/small_business/business_financing/index.cfm?

SBA Financing Who it's for SBA loans are for businesses that are: Owner-operated For profit Organized as a sole proprietorship, corporation, or professional partnership Within the size guidelines designated by the SBA Unable to secure other credit under reasonable terms http://www.bankofamerica.com/small_business/business_financing/index.cfm?

Today’s Activity Business Ideas Discussion Shark Tank? Weekly Dose:http://www.youtube.com/user/khanacademy#p/c/9ECA8AEB409B3E4F/16/8OCjwBkMJ_E Business Ideas Discussion Shark Tank?

Some Useful Sources http://www.mbda.gov/?section_id=3 http://www.grants.gov/ http://www.sba.gov/ https://www.cfda.gov/ http://active-vp.com/

10/27/2011 We’ll be talking about Marketing Next Meeting 10/27/2011 We’ll be talking about Marketing