Starting a business is not an easy job. That too, when your business is equipment based and you need to get this equipment financed from the market. New businesses generally don't have a track record, so it becomes a little difficult for these small business loans getting financed. However, you should always be open to multiple sources and explore all the possibilities of funding. The various sources you could consider are as follows:
Banks are the primary sources of small business loans. However they are very wary of dispensing loans to new small businesses. Further getting equipment financed specifically makes it more difficult. Equipment is an asset that depreciates with time as compared to real estate that appreciates in value. If you have an excellent business plan, your goals are well set, projections realistic and profitable? Even these banks would readily sanction your loan.
Getting funding from family members is the easiest and the most reliable source. Find a family member that you trust and is willing to lend you the required money. Put forward a well-planned proposal and explain to him the return on investment. Sharing a significant part of the revenue generated might attract and motivate him to extend the help. At times it might seem awkward in approaching a family member but numerous businesses rely heavily on this source of funding.
Friends are those who have faith in you and stand by you in your thick and thin. If your business plan is outstanding and you believe in the profitability of your investment, go approach a friend and you are most likely to get a loan. Finding a friend should not be difficult as you already have a clear picture of whom to approach and whom not to.
Small business associations
Many localities have small business lenders and these associations promote local development by funding local entrepreneurs. They will look into your proposal and judge its viability and how it creates opportunities for the local people. Giving your proposal a local area development angle might help. They might even suggest you to make certain changes in your plan to increase profitability and benefit the society at large.
You have unfortunately been turned down by all the above mentioned sources, do not panic. Create a priority list of things to do and purchase. Spend the limited fund on the equipment that you think is the most important and wait for the fund to bounce back. When the funds revert with the revenue generated, look into other priorities. This might take a little time but you will certainly be able to manage your crisis. Thus a phased approach would help you in getting all the equipment gradually.
The ultimate goal of any business is profit. Therefore, if your business generates good revenue, any of these sources would happily extend business loans time and again. it is just about creating a positive image and building that trust among the investors.