QUESTION:
How do I get debt financing and how does it work? I’m thinking along the lines of Silicon Valley Bank and others who debt finance startup ventures.
ANSWER:
Charles Swan
by Charles Swan at The Virtual CFO
You need to prepare a proposal, which will resemble a business plan, that will convince the lender that you will be able to repay principal and interest as scheduled. This is done through a history of earnings
Silicon Valley Bank, as well as other venture lenders, lend to companies that do not qualify for conventional bank credit, but base their decisions and pricing on their analysis of the company’s prospects, and most importantly, the caliber of the venture investors. They will also want warrants if they decide to participate.
Your CPA and attorney should be able to make recommendations and introductions.
Good luck!
That last line should read, ” Compound Profit provides debt financing to businesses that CAN'T receive financing from banks.” If you've been turned down by your bank for a business loan, come talk to us. We'll find a way to provide your business with the financing it needs.
Compound Profit does strictly debt financing for small businesses, including startups. We don't want any equity of your business, and we don't want to tell you how to manage it. Think of our financing as a way to grow your business and thrive, which could give your business traction to increase its valuation from angels or venture capital at a later date. Many start-ups give up equity too soon, and as a eult, have to give too much equity in exchange.
Bob Gerughty
SF Bay Area office
Compound Profit
We specialize in providing debt financing to businesses that can receive financing from banks.