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FAQs
Read on to find brief answers to frequently asked questions about the Entrepreneurial Center and its services.
What are the charges for your services?
There are tuition charges for the Self-Assessment, Comprehensive Business Training, and Dreams to Reality programs. The cost of each program is highly subsidized by our partners, and the cost to the client represents only a percentage of the true cost. For people of moderate to low income, further assistance is available. Please contact us for more information regarding the program fees, as they change frequently and are highly individualized. The initial one-on-one counseling session is free of charge.
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Do I have to take the Self-Assessment Workshop to be enrolled in the Comprehensive Business Training program?
Yes, the Self-Assessment Workshop is a prerequisite for everyone, whether they are in business or not, to be able to participate in the 16-week program.
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Are you a statewide program?
Yes, we are a statewide program. Our program training site is located in Hartford. View the current training schedule in your area here.
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Does the Entrepreneurial Center have grants for businesses?
No, the Entrepreneurial Center does not provide startup grants or other grants to individuals or businesses. The SBA, one of our partners, does offer a variety of loan programs, which can be found at www.sba.gov/financing/indexloans.html.
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How do I finance my business?
Entrepreneurs have many options available to them in financing their businesses. Due diligence and gathering the facts are your most important first steps. You need to determine how much capital is needed, available sources of funds, how to write a loan proposal and how to prepare financial statements. The following links provide some guidance: www.business.gov/topics/finances/ and www.sba.gov/expanding/grants.html.
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Can the Entrepreneurial Center help my business get financing?
The Entrepreneurial Center is not a direct lender; however, we have a working relationship with banks and alternative lending institutions throughout the state. We can help facilitate access to capital through technical assistance in preparing your business plan and one-on-one access to capital products. And we will help you make the best first impression before you apply for a loan.
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I'm still in the planning stages of a business startup. Can you do anything to help me?
The majority of our businesses are startups, and all began with an idea. If you're still in the planning stages, we recommend that you sign up for a free counseling session, where you can discuss the idea with one of our counselors and devise a plan of action.
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How can I get a grant or loan to start up my business?
There is no federal grant money for individual business owners. Even though many publications and talk shows publicize grants to small businesses, the only grants available are for non-profit women's business centers that provide training for women who want to start or expand their businesses. The other grant program is for research and development for technology-based products and services for the government.
Despite a lack of grant programs, the SBA has an excellent financial assistance program that encourages bankers to help small businesses. This "loan guaranty" program is the agency's priority. Apply for a business loan at your bank. If financing is unavailable on reasonable terms from the lender, ask the bank to submit your loan application to the SBA for consideration. In partnership with your local bank, the SBA may offer a government guaranty of a loan to be made by that lender. SBA programs are especially valuable for new business startups and in instances where collateral is weak and/or a longer repayment term is needed. The SBA loan application package can be as simple as a one-page form, and the SBA can approve an application in one to seven days. Credit-worthy potential small business owners and existing small business owners who require capital to start or expand their business may find that SBA's financial assistance programs can help them secure the financing that they need. SBA has no funding for direct loans.
For information on SBA loan programs contact the SBA office closest to you, or call the SBA Answer Desk at (800) 8-ASK-SBA. Information is also available on the SBA Web site at: www.sba.gov. Click on "Financing" to view the variety of loan programs available through the SBA. Once you choose a loan program, you will see how the program works and whom to contact for more information.
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Where do I get information on small business taxes?
Assistance can be found at the IRS Web site at www.irs.treas.gov.
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Do I need my own money to start a business?
Yes. Lenders and investors want proof that you have a considerable amount of your money in the business; your money is at as much risk as their money. If a business owner does not have equity in the firm, it is more tempting to walk away from a failing business, because there is little to lose.
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Where do I get "startup" money?
The answer will vary depending on the amount of money you need, the length of time you have been in business, your geographic location, your personal credit rating, your ability to provide collateral, the viability of your business idea and whether you are looking for debt or equity financing.
Explore these sources of capital:
- Banks - developing a relationship with a bank and a banker is key
- Small business development centers - while they may not have access to funds, they will almost certainly have resources and contacts
- The "Friends and Family" bank - this is probably the most common and most successful source of funds for startups
- Community development centers - many of them have money to lend
- Venture capital - for those who don't mind giving up financial control of their business
- Angel investors
- The use of supplier/vendor financing - have a supplier extend 120-day terms instead of the usual 30, while you extend only 30-day terms to your customers
- Seller financing
- End-user funding - have the ultimate customer finance the research and development of the product
The SBA also offers the Prequalification Loan Program, which may permit you to pre-qualify for an SBA loan guarantee before applying to a financial institution. SBA approval is based on ability to pay, not collateral. Another option by SBA is their Microloan Program, which provides short-term startup or expansion loans of up to $25,000. Loans are made through non-profits with experience in lending and technical assistance. For more information, visit www.sba.gov, and click on "Financing."
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Are there other sources of financing for startup businesses?
Yes. First consider your personal resources. Ask your bank about a personal loan, and remember that a home equity loan is still the cheapest and fastest loan to obtain. Next, approach family and friends - those who know you best and who want to see you succeed. Show them investment opportunities for your business. Let them have an equity stake in your business, or if they prefer to lend you the money, write up an informal contract and pay back the loan as if you were working with a bank.
Factoring companies provide money lent upon receivables. If you have a product or service that you have already provided and billed for, but you do not expect payment for several weeks, a factoring company will quickly provide you up to 80 percent of the total invoice. This cash helps to cover the cash flow of the company until you receive payment.
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How do I determine if my product/service will sell? Do I need to hire someone else to do my market research?
There is no easy answer to this question. Generally speaking, there are many low-cost or free resources that can assist you in your market research. For example, many public libraries have Info-Connect services that provide valuable information. The Department of Commerce has census data available. You can certainly conduct their own market surveys - both written and verbal, by telephone or mail. You must understand your competition - their strengths and weaknesses and how their business stacks up, as well as what your business's "added value" is - what positively distinguishes your product or service from your competition. You may conduct your own informal focus groups to determine if there is a demand for your product or service and/or contact the association(s) under which your product or service falls for information on markets. Many associations have departments that collect market data on an ongoing basis. You may even choose to hire an outside market research firm, but in many cases, this is not necessary.
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How can the Entrepreneurial Center assist in accessing alternate lending sources?
The Entrepreneurial Center can introduce you to other loan programs specific in their designations, such as the town or neighborhood in which the business is located. We can also assist you in packaging a loan and referring you to local banks for funding and guarantee programs, such as those offered through the SBA.
The SBA Guaranteed Loan Program is also available to most small businesses that are unable to borrow money on reasonable terms from conventional lenders. Some primary benefits of an SBA Guaranteed Loan are longer terms for repayment and the possibility of obtaining a loan without adequate collateral, provided the business and the owner(s) have made their best efforts to offer collateral to the best of their capacities.
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