Three common startup shapes
The storefront or kitchen
Spending comes first: build-out, equipment, first inventory, rent deposit, and a staff you must pay before regulars arrive. Sales are daily, so once the doors open the bank account shows activity quickly. The risk is the gap before foot traffic builds.
The mobile or field-service business
A van, tools and insurance are the main costs. Customers pay at the end of a job or on invoice, so there can be a lag between work and cash. Tradespeople who bill property managers or general contractors feel that lag most.
The B2B vendor
This owner sells to businesses or institutions and invoices for work. Sacramento has plenty of customers of this kind, given that it is the state capital with more than 120,000 public sector employees and a large healthcare presence. The risk is waiting on payment cycles that the vendor does not control.
Size the first year by shape
| Shape | Largest up-front costs | Typical cash gap |
|---|---|---|
| Storefront or kitchen | Build-out, equipment, deposit | Weeks before traffic builds |
| Field service | Vehicle, tools, insurance | Time between job and payment |
| B2B vendor | Staff, software, bonding or insurance | Invoice-to-payment delay |
For illustration, a new field-service company that needs a $30,000 van and tools plus $20,000 of operating cash for the first two months has a $50,000 plan. If sales ramp slower than hoped, the operating cash buys time. Round numbers, not our terms.
What we look at for a new business
We fund $25,000 to $5,000,000, with funding in as little as 24 hours once approved. We consider FICO scores of 500 and up, ask for about three months of business bank statements and do not require tax returns. The application takes about five minutes and uses a soft credit pull. Sole proprietors can apply. Because we read about three months of business bank statements, open the business account as early as you can and keep personal spending out of it. A clean record of deposits and expenses is the strongest evidence a young business can offer, and you do not need tax returns to apply.
A first-quarter checklist
- Open a business bank account and route every sale and expense through it.
- Keep receipts for the equipment and inventory you buy.
- Track the day each customer was invoiced and the day they paid.
- Set aside a cushion for the slowest early month, not the average one.
Doing this for the first ninety days gives you, and us, a clear record to read.
Pitfalls worth avoiding
- Buying equipment for a capacity you have not yet sold.
- Signing a long lease before you have a first customer.
- Borrowing for the full dream plan instead of a first phase.
Also consider equipment financing for a specific machine, a line of credit for recurring gaps, or working capital. Owners in Elk Grove, Folsom, Rancho Cordova and Citrus Heights can apply too.