5 Tips on Financial Packages

Understand that loans and venture capital often come in packages—that is, each may have several sources of funds and one piece of financing may depend on another. Recognize that even government programs may require several sources. Under the federal 504 loan program, funds might come from a certified development company and one or more banks. Expect to come up with some cash yourself. A down payment or demonstration of willingness to risk some of your own capital may be required. Be sure you understand what’s expected of you. For example, does a government program expect you to employ a certain number of workers within a certain time period? Be patient. When more than one financing institution is involved, there’s more paperwork, and each institution must give its approval.