FAQs

Where can I find a grant to fund my business startup?

Many people are under the assumption that there are grants available to start new businesses; however, this is not true.  Ninety-nine percent of the time, grants are set aside for non-profits and other eligible organizations and are not available to for-profit ventures.

How can I finance my business start-up?

Individuals can invest their own savings, borrow against life insurance policies/annuities, and/or borrow money from a bank or credit union.  Seeking loans from family and friends is also a possibility.  Some business start-ups seek funds from business partners, venture capitalists and angel investors.

What does a banker look for when reviewing a start-up loan request?

Bankers rely heavily on credit scores to validate a person's personal financial situation and as an indication of his/her character.  In addition to credit scores, management experience and work experience will be considered.  Bankers will also review the person's historical and personal cash flow.  Personal debts should not exceed 40 to 50 pecent of gross income.  Collateral will almost certainly be required with loan applications.  Finally, bankers will consider the strengths and weaknesses of your industry specifically, and the economy as a whole.

What is a micro-enterprise?

A micro-enterprise is a business that can be started for a capital investment of $25,000 or less and has fewer than five employees, including the owner.

Why isn't a non-profit considered a small business?

Not for profit organizations are covered by Ohio Revised Code Sec. 1702.  In general, these organizations are treated the same as a for-profit, except there are no shareholders and no owners.  Some non-profits are governed by a board of directors, others are guided by their members; these individuals do not own the organization. They only perform the duties associated with their respective positions.  Like a for-profit, the non-profit board appoints the officers and the officers hire the workers.  Ohio non-profits must have a board of directors/members and the Ohio Revised Code stipulates that activities of the organization, especially a charitable one, i.e. 501(c)(3) must not personally benefit the officers or directors of the organization.

Why do I need to write a business plan?

A business plan is written for three major reasons:

1. The process of putting a business plan together forces the business owner to take an objective, critical, unemotional look at the proposed business in its entirety.
2. The finished product, the business plan, is an operating tool that if used properly will help the proposed business owner manage the business and work effectively toward its success.
3. The completed business plan communicates the proposed business ideas to others and provides the basis for the financing proposal.