What a funder sees when there is little history
Without years of financials, the review rests on a few things: about three months of business bank statements, the owner's credit, and a plain explanation of how the money will be used. We consider FICO 500 and above, do not require tax returns, use a soft credit pull and offer a 5-minute application. Sole proprietors can apply. The strongest evidence a new business has is regular customer deposits, even modest ones.
Starting in Long Beach
Long Beach is a charter city of 466,742 people with a long record of changing its economic base: oil, the Navy, aerospace and, now, a major port. Wikipedia describes the economic base as having changed over the years. For a new business, that history is a reminder that local demand is varied: visitors on the waterfront, students and staff around California State University, Long Beach, and the employers and suppliers linked to the port.
The city is also the largest in California that is not a county seat, which has little practical meaning for you except that it works as its own market, with its own neighborhoods, instead of a suburb of another downtown.
A one-page startup plan that actually helps
- Who pays you? Name the first ten customers or customer types.
- What does one sale cost you? Materials, labor, fees.
- What are the fixed costs for six months? Rent, insurance, software, a first hire.
- What will the money buy? Equipment, inventory, a lease deposit, marketing.
- What happens if sales are half of plan? If the business still survives, the plan is sturdy.
Choosing what to fund first
New owners often try to fund everything at once. A more resilient order is: first the thing that produces revenue (equipment, inventory, a vehicle), then what lets you operate for a few months (rent, payroll), and last what makes the business look finished (signage, extras). A smaller launch that opens on time and earns usually beats a perfect launch that arrives late. Keep receipts for what you buy, because they link directly to the deposits that follow.
Mistakes new owners make
- Mixing personal and business spending, which makes the statements hard to read.
- Borrowing for months of rent but not for the inventory that earns it.
- Taking an advance before there are steady daily deposits to repay it.
- Waiting until the account is empty to ask.
For illustration only: a new food truck owner needs $35,000 for a truck, permits and a first month's food. If revenue in month one is $6,000 against $9,000 in costs, there is a $3,000 hole the plan should have anticipated.
Where to go next
Requests run from $25,000 to $5,000,000, and funding can arrive in as little as 24 hours once approved. For equipment purchases look at equipment financing; for operating cash, working capital; and if credit is a concern, bad credit business loans in Long Beach. Overview on the Long Beach funding page. Apply here.