Federal business grants for woman

A major challenge entrepreneurs face is how and where to get the money to fund that brilliant business idea. While there are many sources of business capital, the two most common are personal savings and bank debt financing. Outside of having an excellent business and personal relationship with your banker, a thorough loan application is a must to getting the funds needed. A typical loan application will request background information on the owner(s), amount of funds requested and purpose for the loan along with a business plan to support your ability to repay. Loan applications also request current personal financial statement, a description of the pledged collateral and a personal guarantee to repay the loan

Let's use Quick Serve Restaurants (QSR) such as McDonald's, Burger King or Wendy's as an example here. The loan application must first describe the owner's career background, how that experience translates to the QSR's business environment, and the skills possessed that will lead to a successful location. The QSR's in this example could cost between $300K & $2.8M, not including real estate, so the loan application must describe the amount of money contributed by the owner(s), and the balance of the amount needed that will come from either debt or equity financing. It may be possible to acquire an existing business plan from an existing franchisee, however you will need to modify the plan to meet your current situation. Your business plan must also exhibit positive cash-flow projections to be able to repay the loan, a sufficient level of cash injected by the owner (usually a minimum of 20%), and address the owner's Collateral and Credit necessary to meet the loan requirements. If we assume the QSR in question will cost $1.0M and the owner also has a net worth of $1.0M, a satisfactory loan application may include liquid capital contributions from the owner of $250K (25%), and a loan request for the remaining $750K. Bankers like to see your net worth equal the total cost of the project. That way, they know the bank has avenues to collateralize your loan with some of your personal assets.

Another popular means of securing is capital is equity financing. Equity financing can come in the form of venture capital or angel investors. Let's investigate a Choice Hotel Property like Comfort Suites, or a Wyndham Garden Hotel, which would both be at least $4.0M to build. If we used our 20% liquid investment rule of thumb, the owner(s) would be required to inject $800K of capital, and finance the remaining $3.2M. You could raise the balance by offering equity in the hotel, giving investors a percentage ownership in return for their money. Maybe you'd be willing to give up 32% ownership of the hotel in return for $3.2M equity from investors. You may construct the equity deal where 1% ownership of the hotel costs $100,000, however you guarantee a return before owner's profit of 10% per year, plus some additional incentives should you hit preset profitability targets. In addition to equity financing, other sources of funds are grants offered by local and state governments.

A loan specialist or financial advisor should be able to help you compare the differences between those capital-intensive businesses, and more service oriented businesses such as Century 21 or Coldwell Banker. These two opportunities represent the well established real estate service model, however they can be started with a fraction of the cost of a hotel. At the low end, the total investment is in the $20K range, where the upper end could be greater than $400K. What surprises many first-time entrepreneurs is that an investment in a service business for $20K could lead to the same profit level as a $4.0M Comfort Suites Hotel There is no guarantee that the higher the investment, the higher the return. This is where the help of a professional business advisor, loan consultant or CPA could help you create a business plan that incorporates their experience and knowledge of the industry you're pursuing. Something as simple as a best and worse case Pro Forma, or a comparison of debt vs. equity investors might make the difference between a loan advisor approving your loan request.

RESOURCES

PUBLIC

U.S. Small Business Administration (SBA)--www.sba.gov

Small Business Investment Companies--www.nasbic.com

Small Business Development Center--www.sba.gov/sbdc/

SBA LowDoc Application--www.sba.gov/sbaforms/sba4-L.pdf

Federal Resources--www.business.gov

PRIVATE

Creating a business plan--www.sba.gov/library/pubs/fm-14.doc&www.bplans.com

Venture Capital Firms--www.vfinance.com & www.vcfv.com

Wall Street Journal Small Biz Center--www.startupjournal.com

Entrepreneur Magazine Biz Center--www.entrepreneur.com

National Community Capital Association--www.communitycapital.org

SBA Angel Investor Network--www.sba.gov/opc/pubs/co71.html

Loan Consultants--www.businessresourcestore.com & www.businessbroker.net/diamond.ihtml

Private Funding Sources--www.cit.com & www.wellsfargo.com

International Franchise Association--www.franchise.org

The UPS Store

In 1999, Jane Lockett, of Dana Point, California, embarked on a new journey when she opened a The UPS Store location (formerly Mail Boxes Etc.). By following her entrepreneurial spirit, she has changed not only her life, but also the lives of others.

Jane's desire was to be an independent businesswoman and find an opportunity to create a relationship with her community and give something back to the people who supported her. Upon learning about Laura's House, a local shelter for victims of domestic abuse and their children, she organized a back-to-school drive for the children at the shelter, to coincide with her business opening. Since that day, she has conducted a number of events to benefit the children at Laura's House, and each woman coming into the shelter is provided complimentary mailbox services through Jane's store.

"In addition to giving them a safe place to receive mail, it helps them achieve a sense of control over their own lives," says Jane. It's a situation Jane understands all too well, having lived through an abusive relationship as a teenage mother.

Jane is also pleased that she has been able to turn her business venture into a multigenerational family affair, with her husband and daughter heavily involved in day-to-day operations. Jane's mother serves as family cheerleader and advisor.

The concepts of family and community have long been an integral part of the African-American culture. For women like Jane Lockett, entrepreneurship has provided them with a way of honoring those traditions while pursuing the American Dream.

Choice Hotels

Choice Hotels International is one of the world's largest hotel franchising companies with over 5,000 hotels open and under development worldwide: The company franchises under the Comfort Inn, Quality, Sleep Inn, Clarion, MainStay Suites, Econo Lodge, and Rodeway Inn brand names.

With over 60 years of successful hospitality and franchise development experience, we understand what it takes to succeed and how to get there. Choice Hotels is focused on providing franchisees with a solid return on investment by offering a proven portfolio of hotel resources.... All designed to help you create and maintain the best hotel for your unique needs.

Choice Hotels International provides you with:

* $50 million national, multi-brand marketing and advertising campaign

* Powerful reservation delivery via 800.4CHOICE and choicehotels.com that booked $1.3 billion in room revenue in 2003.

* Effective property management systems that ensure that your hotel operates at its most cost-efficient.

* New hotel services to assist you with every detail of opening your hotel.

* Ongoing training to ensure you and your staff are always up to speed on the latest principles and practices in hospitality.

* Continuous field support though your personal Franchise Service Director.

And, Choice Hotels currently is offering a program to attract African American, Hispanic, and Native American entrepreneurs to the world of hotel ownership. Subject to certain terms and conditions, we will provide up to $125,000 in incentives for a new or converted midscale brand hotel or $50,000 for a similarly franchised economy brand hotel. We are committed to recruiting new minority franchisees and invite you to join the Choice Hotels family.

For more details regarding this incentive program and applicable terms and conditions, or to learn more about franchise opportunities with Choice Hotels International call 800.547.0007, visit choicehotelsfranchise.com, or email us at franchise_sales@choicehotels.com.

Choice Hotels, Choice Hotels International, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, MainStay Suites, Econo Lodge, and Rodeway Inn are proprietary trademarks and service marks of Choice Hotels International, Inc.[C] 2004 Choice Hotels International Inc. All rights reserved.