Understanding Financial Packages

Loans and venture capital often come in packages—that is, each may have several sources of funding, and one piece of financing may depend on another. 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.

That means you should 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. You should also 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? Finally, it’s important to be patient. When more than one financing institution is involved, there’s more paperwork, and each institution must give its approval.

Ken Yancey CEO, SCORE Washington, D.C.

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