If getting a loan for a business startup is challenging enough, getting a loan for the startup of a technology business is even extra challenging. There are a lot of things that could go wrong in a technology business so that banks and financial companies are extra cautious in lending money to technology business startups. However, it is not to say that obtaining a loan for technology business startup is out of the question.
There are special venture capitalists that have appetite for investing in promising new technologies. These capitalists are technology entrepreneurs’ best friend in starting up their businesses. Before you can get the attention of venture capitalists, however, you need to make sure you have all requirements.
Aside from detailed, flawless business plan, you should prepare other requirements. Venture capitalists will even look at the character of the technology entrepreneur. They will favor technology entrepreneurs who show enthusiasm, honesty, and genuine belief in their products or services. The venture capitalists will also look into the technology companies’ expertise, experience, and skill set of the employees. All these parameters will make sure that the company will make money, maybe not immediately, to repay the loan with interest.
The technology company’s top management must do all they can to show to the venture capitalists their capabilities in adopting to change while maintaining growth. The strength of the company’s management team alone is guarantee enough for some venture capitalists. Products and services come and go every year, but the strength of the company’s management team to adopt to change ensures the company will ride out all challenges along the way.
It is also nice if the technology entrepreneur can chip in some capital from his own pocket or from other so called “angel investors.” This shows the venture capitalists that you or other people believe in your new technology to make money in the future.
Angel investors include family, friends, and other interested party to your new technology idea. It is not hard to convince your family and friends, so take advantage of this opportunity to obtain perhaps the quickest loan. The entire capital you needed may not be covered by your angel investors, but the gesture will be seen by venture capitalists as positive sign to your business.
Some state governments also have funds intended to invest on promising emerging technology companies. Check out your state business office if they offer loans for emerging technology companies and inquire how you can avail of the funds. Often, these state-owned loan opportunities require less collateral compared to bank and other financial investor loans. In some state-owned foundations, a technology entrepreneur can burrow anything from $50,000 to $500,000 worth of financial assistance.
Getting loan for your technology business may be challenging, but with the right attitude and right idea to sell, the money you need to start your technology business is still within your reach. Just be prepared to be unique and to think out of the box to impress your possible investors.