Business Financing Options Chart
|
Considerations
|
Friends & Family
|
Traditional Bank Loan
|
Venture Funding
|
Capital Advance
|
|
Minimum Loan Amount
|
?
|
$25,000
|
$250,000
|
$3,000
|
|
Business Plan Required
|
Usually
|
Certainly
|
Certainly
|
Never
|
|
Business Tax Returns
|
Seldom
|
2-3 years’
|
2-3 years’
|
Never
|
|
Personal Tax Returns
|
Seldom
|
2-3 years’
|
2-3 years’
|
Never
|
|
Business Guarantees
|
Usually
|
Yes
|
Usually
|
Never
|
|
Personal Guarantees
|
Seldom
|
Certainly
|
Possibly
|
Never
|
|
Collateral Requirements
|
Seldom
|
2:1 ratio typical
|
Possibly
|
None
|
|
Closing Costs and Fees
|
Seldom
|
Usually
|
Usually
|
None
|
|
Approval Time
|
?
|
4-8 weeks
|
4-8 Weeks
|
24-48 hours
|
|
Cost of Capital
|
Varies
|
Low
|
Very High
|
Medium
|
|
Additional Cost Considerations
|
Depends on Success
|
Always least expensive, but most restrictive
|
Owners’ equity, control, and autonomy
|
Financial Only
|
|
Use of Proceeds
|
Typically None
|
Restricted to use outlined in business plan
|
Restricted to intended business purpose
|
No Restrictions.
|
